* Indian rupee ends at 55.06/07/dlr vs 55.1650/1750 on Fri
* Fiscal slippage to hurt rupee in the medium term - traders
* Rupee seen moving in 54.50-56.00 range in the near-term
By Swati Bhat
MUMBAI, Nov 19 The Indian rupee rebounded on
Monday from over two-month lows in the previous session on the
back of dollar sales by custodian banks and a broad risk-on mood
globally, but dollar demand from oil firms capped the gains.
Global shares and regional currencies gained on Monday on
what investors perceived as encouraging signs of progress in
talks to resolve the fiscal crunch in the United States.
However, caution is expected to prevail ahead of the start
of the winter session of parliament, which will test the
government's resolve to pass legislation at a time when worries
about the fiscal deficit are rising.
Last week, India raised less than targeted in its auction of
2G mobile spectrum, exacerbating doubts about whether the
government can meet its goal to contain its fiscal deficit at
5.3 percent of gross domestic product.
"After the 2G auction it seems difficult for the government
to contain the fiscal deficit at 5.3 percent as estimated by the
finance minister, so bias will be towards weakening of the
rupee," said Uday Bhatt, a forex dealer with UCO Bank.
"The broad range for the near-term should be 54.50 to
56.00," he added.
The partially convertible rupee closed at 55.06/07
per dollar versus its previous close of 55.1650/1750. On Friday,
the unit had dropped to a low of 55.2050, its weakest since
Traders saw good dollar inflows from custodian banks,
helping the rupee gain to as much as 54.9375, although demand
from oil refiners capped broader gains in the domestic currency.
Traders said the movement of the local share markets will
also be key, given the importance of foreign fund flows to
Indian markets. The benchmark BSE index edged higher on Monday,
rebounding from two-month lows.
In the offshore non-deliverable forwards market, the
most-active one-month contract was at 55.32 while the
three-month was at 55.90.
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 55.11 with a
total traded volume of $4.35 billion.
(Editing by Rafael Nam)