* INR ends at 55.535/545 vs pvs 55.21/22, falls for 4th day
* Rupee down for four straight weeks, loses 3.6 pct
* Persistent dollar demand from oil firms hurts rupee
By Swati Bhat
MUMBAI, Nov 23 The Indian rupee fell to over
two-month lows on Friday, marking a fourth straight weekly loss
for the currency and its longest losing streak in nearly six
months, weighed down by persistent dollar buying by oil
However, the central bank is believed to have sold dollars
via state-run banks around 55.50 levels, putting brakes to a
steeper fall in the currency.
Although the Reserve Bank of India has been speculated to
have acted before, Friday's session marked the first clear
signal of dollar sales since mid-October, dealers said.
The rupee has lost 3.6 percent of its value over these four
weeks, with global markets weakening and amid growing worries
about whether the government can contain the fiscal deficit and
push through reforms in the winter session of parliament that
kicked off this week.
"With month-end dollar demand still going through, the
pressure is on the rupee to weaken. However, the market will be
cautious of intervention from the central bank," said Vikas Babu
Chittiprolu, a senior foreign exchange dealer with state-run
"There was a strong resistance at 55.40 for the USD/INR
which, once broken, gave way to further gains. Now 56.10 is the
next key level," he added.
The partially convertible rupee closed at
55.5350/5450 per dollar versus its previous close of 55.21/22.
The unit dropped 0.6 percent on day, taking its fall to 0.7
percent on the week. The rupee fell to 55.53 during the day, its
weakest since Sept. 11.
Traders said sustained dollar buying by oil firms, the
biggest buyers of dollars in the domestic currency market, hurt
the rupee on Friday.
Despite the recent trend of weakness, the rupee remains far
away from the bearishness seen in the nine weekly losses to June
1, when the unit had lost 8.4 percent, in its worst losing
streak since the Lehman crisis.
The rupee had hit a record low of 57.32 on June 22.
Dealers said they expect the pair to hold in a 55 to 56.10
band next week, with exporters expected to step in to sell
dollars around 56-56.10 levels.
Traders said they will continue to monitor developments at
the winter session of parliament for indications of its likely
impact on foreign fund flows. The sessions, however, have so far
been marred with adjournments with no key decisions taken.
The market is keenly waiting to see if the government can
pass key reforms such as foreign direct investment in pension
and insurance, as well as the banking amendment bill. Failure to
pass any of the key reforms could even eventually push the
rupee down towards 57-levels traders said.
In the offshore non-deliverable forwards market, the
one-month contract was at 55.81 while the three-month was at
Westpac says 1-month USD/INR NDF could push above the 56
level in coming weeks as fundamentals still suggest a near-term
turnaround is unlikely, even as valuations on a NEER basis are
cheap compared with the rest of Asia.
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 closed at around 55.58 with
a total traded volume of around $5.3 billion.
(Editing by Anupama Dwivedi)