Rupee gains on fund inflows; budget next trigger

MUMBAI Mon Feb 18, 2013 5:27pm IST

A Kashmiri woman walks under a garland made of rupee notes on display at a market in Srinagar September 3, 2012. REUTERS/Fayaz Kabli/Files

A Kashmiri woman walks under a garland made of rupee notes on display at a market in Srinagar September 3, 2012.

Credit: Reuters/Fayaz Kabli/Files

Related Topics

MUMBAI (Reuters) - The rupee came off one-month lows to end higher on Monday, as late inflows related to foreign funds selling dollars outweighed demand from oil importers and weak Asian currencies which were weighed down by continued worries about the potential for competitive devaluations.

Flows are expected to determine near-term movements as investors wait for the 2013/14 budget to be unveiled on February 28.

A budget that soothes foreign investors could help support the rupee as the current account deficit is near record highs and the scope of monetary easing remains limited.

The central bank chief struck a hawkish note on Saturday and said there are upside risks to inflation from food and commodity prices, while calling room for monetary easing "limited.

"Profit taking by some custodial banks and also small selling interest from some corporates took spot to close at 54.1800," said Ashis Barua, forex dealer at IndusInd Bank.

If the dollar weakens against other majors, the rupee may gain to 53.75-53.80 levels on Wednesday, he added. The local forex market is closed on Tuesday for a local holiday.

The partially convertible rupee closed at 54.185/195 per dollar versus its previous close of 54.22/23. It fell to 54.44 in the session, its lowest since January 17.

The soft tone in regional markets came after G20 leaders over the weekend refrained from singling out Japan over its policy to weakn the yen, while its promises not to devalue currencies was seen doing little to lead to stable exchange rates.

The rupee was supported by dollar selling by custodian banks in a session in which domestic shares edged higher, recovering from the 2013 lows hit on Friday.

In the offshore non-deliverable forwards the one-month contract was at 54.51, while the three-month was at 55.12.

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 54.31 with a total traded volume of $4.6 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

REUTERS SHOWCASE

Coal Sector

Coal Sector

Foreign firms with India units could mine, sell coal - source  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Pollution Levels

Pollution Levels

Delhi braces for worst air quality this Diwali week.  Full Article 

Stalemate

Stalemate

WTO prepares for crisis talks as India keeps veto on global deal.  Full Article 

Deal Talk

Deal Talk

Smartphone repair company B2X steps up expansion with Indian deal.  Full Article 

Ebola Outbreak

Ebola Outbreak

India to step up travel surveillance to stop any Ebola outbreak  Full Article 

Reuters India Mobile

Reuters India Mobile

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