India rupee weakens to near 2-wk low; down for 4th straight day

Mon Feb 11, 2013 5:15pm IST

Related Topics

* Rupee ends at 53.8450/8550 per dlr vs 53.50/51 on Fri

* Dlr demand from oil firms, lack of supply hurts

* INR seen in 53.50 to 54.00 range until factory data

By Swati Bhat

MUMBAI, Feb 11 (Reuters) - The Indian rupee weakened to a two-week low on Monday, dropping for a fourth straight session, as dollar demand from oil firms and other importers weighed.

Traders said the rise in global crude oil prices on Friday pushed up greenback demand from oil importers, the largest buyers of dollars in the domestic currency market.

Concerns about economic growth also continued to weigh after Reserve Bank of India Governor Duvvuri Subbarao said inflation was "still high," casting doubt about whether the central bank would cut interest rates at its March policy review in spite of sharply slowing economic growth.

"The rupee was mostly stuck in a band in light volumes but there was good demand from oil firms which pushed the unit down," said A. Ajith Kumar, a foreign exchange dealer with Federal Bank, adding the market would now await the factory output data on Tuesday for near-term direction.

The partially convertible rupee closed at 53.8450/8550 per dollar versus its previous close of 53.50/51. It dropped as low as 53.86, its lowest since Jan. 29.

A weaker euro also hurt sentiment, with the common currency within sight of a two-week low against the dollar, while regionally trading was muted as most Asian markets were closed for the Lunar New Year holiday.

Traders said lack of dollar supplies also hurt the rupee with the unit expected to move in a broad range of 53.50 to 54.00 until the factory output data on Tuesday.

The worst is probably over for flagging Indian factories but production was likely subdued in December and may have risen an annual 1.1 percent as global demand remained weak, a Reuters poll showed.

In the offshore non-deliverable forwards, the one-month closed at 54.12 while the three-month closed at 54.70.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 53.98 with a total traded volume of $3.7 billion. (Editing by Sunil Nair)

FILED UNDER:

Reuters Showcase

Uber's Woes

Uber's Woes

Uber, other taxi-hailing apps hit new roadblock in Delhi.  Full Article 

Transfer Pricing

Transfer Pricing

India's Vodafone decision eases tax worries for Shell, others.  Full Article 

Facebook Earnings

Facebook Earnings

Facebook tops Wall Street revenue target in 4th quarter.  Full Article 

Governance Reforms

Governance Reforms

IMF sets June deadline for progress on governance reforms.  Full Article 

Fed's Stance

Fed's Stance

Fed upbeat on U.S. economy, cites strong job gains.  Full Article 

Tumultuous Run

Tumultuous Run

McDonald's CEO Don Thompson leaving.  Full Article 

Samsung Results

Samsung Results

Samsung Elec's smartphone primacy under threat from Apple after weak Q4.  Full Article 

Reuters India Mobile

Reuters India Mobile

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