Rupee gains for second day as corporates sell dollars

MUMBAI Wed Jan 9, 2013 5:36pm IST

A cashier checks Indian currency notes inside a bank in Agartala July 24, 2009. REUTERS/Jayanta Dey/Files

A cashier checks Indian currency notes inside a bank in Agartala July 24, 2009.

Credit: Reuters/Jayanta Dey/Files

Related Topics

MUMBAI (Reuters) - The 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 (RBI) at its policy review on January 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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Popularity Poll

REUTERS SHOWCASE

Record Highs

Record Highs

Nifty touches record high; software stocks gain.  Full Article 

New Adviser

New Adviser

Arvind Subramanian likely to be chief econ adviser.  Full Article 

Pricing Mechanism

Pricing Mechanism

Govt sets up a four-member panel to re-examine gas pricing.  Full Article 

Royalty Rates

Royalty Rates

India to hike iron ore royalty, miners may struggle to pass on extra cost.  Full Article 

Diesel Deregulation

Diesel Deregulation

Oil ministry to seek Cabinet nod on diesel deregulation - sources  Full Article 

Commodities

Commodities

Gold near two-month low; set for weekly drop on interest rate fears  Full Article 

Reuters Exclusive

Reuters Exclusive

Apple iPhone 6 screen snag leaves supply chain scrambling   Full Article 

Helping Regional Mills

Helping Regional Mills

Govt raises sugar import duty to 25 pct from 15 pct.  Full Article 

Curbing Risks

Curbing Risks

RBI to lower ceiling on bank loans to a single corporate group.  Full Article 

Reuters India Mobile

Reuters India Mobile

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