Indian rupee edges up; unfazed by political drama

(Updates to close)

By Swati Bhat

MUMBAI, July 8 (Reuters) - The Indian rupee ended slightly stronger on Tuesday, helped by a partial recovery of sharp falls in the stock market after the communist parties withdrew their support for the ruling coalition and another party offered backing.

The partially convertible rupee <INR=IN> ended at 43.26/27 per dollar, off a low of 43.4225 and marginally stronger than Monday's close of 43.295/305. It had hit a 15-month low of 43.50 last week.

"There were custodial banks selling dollars late in the day and the stocks also recovered from the day's lows," said U.Venkataraman, head of treasury at IDBI Bank.

"Oil prices falling below $140 a barrel also improved the sentiment for the rupee partially," he added.

Dealers said the change in political situation would impact the currency only if there was any change in reforms, or if it created further uncertainty.

The communist parties that have provided India's government with a parliamentary majority for four years said on Tuesday they were withdrawing their support to protest a civilian nuclear energy deal with the United States. See [ID:nISL289893]

They called for a vote of no confidence in the government, which believes it will survive having secured parliamentary support from the regional Samajwadi Party.