Indian rupee eases from 13-½ mth lows

MUMBAI, May 22 (Reuters) - The Indian rupee <INR=IN> backed away from its 13-½ month lows past 43 per dollar on Thursday with dealers saying state-run banks sold dollars heavily, likely on behalf of the central bank, around the 43.20 levels.

* At 3:50 p.m. the partially convertible rupee was at 42.95/96 per dollar after hitting a low of 43.20 in early deals, a level it last tested in early April 2007. It ended at 42.83/84 on Tuesday.

* Oil rose to a fresh record high above $135 per barrel on Thursday. [O/R]. India imports about 70 percent of its oil and refiners are the biggest buyers of dollars. Analysts said the rupee may have to adjust lower to reflect a widening trade gap. (Reporting by Saikat Chatterjee; Editing by Harish Nambiar)