Indian rupee snaps 3 days of losses; month-end dollar demand curbs gains

Wed Oct 23, 2013 5:31pm IST

Related Topics

* Rupee ends at 61.59/60 per dollar vs 61.655/665 on Tuesday

* Month-end defence, private oil demand weighs on rupee - dealers

* Foreigners continue to be buyers in Indian stocks for a 13th session

By Subhadip Sircar

MUMBAI, Oct 23 (Reuters) - The Indian rupee rose on Wednesday, but gave up most gains on the back of strong dollar demand from state-run banks intended to be channelled to pay the government's defence payment requirements and concerns about tighter monetary policy in China.

Dollar demand from a large petrochemical company also kept the rupee's gains in check, after the partially convertible currency had tracked gains in other emerging market currencies in the morning after worse-than-expected U.S. monthly jobs data.

A less healthy employment report is expected to force the Federal Reserve to delay any tapering of its monetary stimulus until next year.

Still, the impact globally was largely diffused after a policy adviser to the People's Bank of China told Reuters the authority may tighten cash conditions in the financial system to address the inflation risks, while the central bank refrained from supplying cash to money markets for the second day running.

"Risk correction in global markets rubbed the Indian shores, pressurising the equities and weakening the rupee. Importers added to the rupee's woes," said Vikas Babu Chittiprolu, a dealer at Andhra Bank.

The rupee closed at 61.59/60 per dollar, compared with 61.655/665 on Tuesday. It traded in a 61.05-61.67 band in the session.

The rupee was also pressured as local shares fell, with the NSE index falling 0.4 percent due to profit-taking.

Still, on a more positive note, foreign investors continued to buy into Indian stocks for a thirteenth session on Tuesday, buying shares worth $129.48 million.

In the offshore non-deliverable forwards, the one-month contract was at 62, while the three-month was at 63.01.

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 61.71 with a total traded volume of $2.3 billion. (Editing by Anand Basu)

FILED UNDER:

Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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