* Rupee ends at 55.21/22 per dlr vs 55.11/12 at Wednesday's
* Dollar demand from Cipla, oil firms weighs on rupee
* INR may appreciate with 2nd round of cap inflows-Quant Art
By Swati Bhat
MUMBAI, Nov 22 The Indian rupee weakened for a
third straight session on Thursday as persistent dollar buying
by oil refiners and absence of major dollar inflows due to a
holiday in the United States hurt the local unit.
Traders are also growing wary of India's fiscal stance after
a government source said fiscal deficit could reach 5.5 to 5.6
percent of its GDP in the financial year to end March, which
could require additional market borrowing of 350-400 billion
"Personally, I continue to run moderately short USD
positions even at this stage. I do not agree to the consensus of
56-57 levels on the pair and think the rupee can appreciate
hereon with a second round of capital inflows," said Samir
Lodha, managing director at QuantArt Market Solutions.
The partially convertible rupee closed at 55.21/22
per dollar versus its previous close of 55.11/12.
Traders estimated about $200 million worth of dollar demand,
which they attributed to Cipla, after the drug maker
said on Wednesday it would offer $215 million for a majority
stake in South Africa's Cipla Medpro.
The absence of major flows due to the Thanksgiving holiday
in the United States also weighted on the rupee.
Dealers expect the pair to move in a 54.50 to 55.50 range in
the immediate future, pending developments at the winter session
of parliament which started on Thursday.
"The winter session will be key. The rally seen in the rupee
post the reforms announcement was short-lived, but even a small
negative is hurting the rupee," a senior dealer with a state-run
bank said. The dealer predicted the rupee to remain in a 54.80
to 56 range, and head above 56 by year-end.
In the offshore non-deliverable forwards market,
one-month contract was at 55.51, while the three-month was at
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 55.25 with a total traded volume of $4.3 billion.
(Editing by Prateek Chatterjee)