India rupee gains for 2nd day as corporates sell dlrs

Wed Jan 9, 2013 5:19pm IST

Related Topics

* Rupee ends at 54.75/76 per dlr vs 54.99/55.00 on Tues

* Dlr selling by a large petrochemical firm boosts rupee

* Some ECB inflows also spotted; oil demand limits more gains

By Swati Bhat

MUMBAI, Jan 9 (Reuters) - The Indian rupee gained for a second straight session on Wednesday, boosted largely due to dollar sales by a large petrochemical firm which helped offset the demand for the greenback from oil firms.

The overall rupee outlook remains clouded on the back of the various macro-economic concerns, though in the near-term likely rate cuts are expected to boost foreign fund inflows and help the currency gain.

Traders have discounted a 25-basis-point cut in key rates by the Reserve Bank of India at its policy review on Jan. 29 and calls for a bigger cut are slowly growing in the market.

Industrial output data on Friday and the inflation report on Monday will be key in further setting expectations ahead of that meeting, analysts said.

"Oil demand limited gains in the rupee and I heard of some external commercial borrowing inflows as well," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with Andhra Bank.

"I am expecting 54.65 to 55.10 range for tomorrow. Friday's industrial data and Monday's inflation are both important for the market as the rate decision at the end of this month is dependant on them," the state-run bank dealer added.

The partially convertible rupee closed at 54.75/76 per dollar, stronger than Tuesday's close of 54.99/55.00.

Traders said some external commercial borrowing-related inflows were also seen in the market, boosting the rupee further.

However, oil firms, the largest buyers of dollars in the domestic currency market, were seen purchasing the greenback intermittently, preventing sharper gains in the local unit.

In the offshore non-deliverable forwards, the one-month contract was at 55.09 while the three-month was at 55.68.

In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange, all closed at around 55.00 with a total traded volume of around $5.4 billion. (Editing by Sunil Nair)

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Banking Sector

Banking Sector

India's laggard state lenders face tough sell on capital raising plan  Full Article 

Falling Oil Prices

Falling Oil Prices

Saudis signal no push for oil cut as market to "stabilise itself"  Full Article 

Raising Stake

Raising Stake

Nippon Life to raise stake in Reliance Capital fund unit  Full Article 

Sterilisation Camps

Sterilisation Camps

Sterilisation targets remain in all but name, critics say  Full Article 

Share Buyback

Share Buyback

Samsung Electronics to buy back $2 billion in shares  Full Article 

Bird Flu Scare

Bird Flu Scare

India orders culling after bird flu outbreaks in Kerala.  Full Article 

Microsoft in China

Microsoft in China

Microsoft to pay China $140 million for 'tax evasion'   Full Article 

Flashback: 26/11

Flashback: 26/11

The three-day attack in November 2008 left 166 dead.  Slideshow 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage