* Rupee ends at 54.175/185 per dlr vs 53.935/945 on Friday
* Dealers cite dollar demand by state-run banks for govt's
* Inflows related to Bharti Airtel's stake sale awaited
By Subhadip Sircar
MUMBAI, May 6 The Indian rupee fell to its
lowest in nearly a week on Monday on continued dollar demand
from state-run banks, likely related to the government's defence
The fall in the currency comes on the back of Friday's
weakness after the central bank disappointed markets with a
hawkish tone at its annual monetary policy, despite delivering a
widely expected 25-basis-point rate cut.
Dealers cited continued dollar buying, particularly by a
large state-run bank, as the main trigger for the rupee's fall.
However, dealers are watching out for inflows related to
some recent corporate deals which should provide some support
for the rupee, particularly Qatar's $1.26 billion investment in
Indian telecommunication company Bharti Airtel.
"I expect the rupee to move in a 53.60-54.80 band for now in
the absence of any global developments or policy announcements.
However, if the global dollar strength persists and 54.80 gets
breached, the rupee may see a sharp downside," said Abhishek
Goenka, chief executive at India Forex Advisors.
The partially convertible rupee closed at
54.175/185 per dollar, weaker than its close of 53.935/945 on
Friday, its third successive session of falls. It fell to
54.2475 in session, a level last seen on May 1.
The euro was seen struggling against the dollar after
surveys on Monday showed euro zone private sector activity
faltered again in April, suggesting the region may fall deeper
into recession this quarter.
In the offshore non-deliverable forwards, the one-month
contract was at 54.37 while the three-month was at 54.89.
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
around 54.26 with a total traded volume of $4.2 billion.
(Editing by Anupama Dwivedi)