* Rupee ends at 54.68/69 per dlr vs 54.77/78 on Monday
* Corp dollar demand in early trade had pushed rupee towards
* Parliament nod to FDI in multi-brand retail can push INR
By Swati Bhat
MUMBAI, Dec 4 The Indian rupee strengthened for
a fourth session in five on Tuesday as investor hopes for a
parliamentary approval to foreign direct investment in
multi-brand retail grew a day ahead of the impending vote.
The parliament began debate on FDI in multi-brand retail
earlier in the day with both houses due to vote on the reform on
"If FDI in retail goes through, we may see 54 levels on the
rupee or else we are likely to head below 55," said Uday Bhatt,
a foreign exchange dealer with UCO Bank.
"If there is an increase in foreign institutional investment
limit in government bonds as speculated, we will see a further
upside," he added, predicting a 54.50 to 54.95 range for the
rupee until the vote on Wednesday.
The government is considering a proposal to raise the
ceiling on foreign investments in government and corporate bonds
by $5 billion each, a senior finance ministry official said, as
the country looks to increase vital capital flows.
The partially convertible rupee closed at 54.68/69
per dollar versus its previous close of 54.77/78.
Traders said heavy dollar demand from a technology firm in
early trade had hurt the rupee, pushing it to the day's low of
54.96, but a decline in demand later in the session and
improvement in domestic shares helped the rupee recover.
Some traders said the firm was Mphasis, an Indian IT
services and back-office support provider and a unit of
Hewlett-Packard Co, which had agreed to buy U.S.-based
Digital Risk LLC, a mortgage management specialist, for $175
million on Monday.
Some dollar demand from oil firms, the largest buyers of the
greenback in the domestic currency market, also hurt the rupee.
Indian shares edged higher, rising for the fifth
day in the last six sessions, led by gains in Reliance
Industries, on hopes the government will soon approve
the company's investment plans for the KG-D6 block.
Foreign funds have bought more than $20 billion worth of
domestic shares so far this year and bought debt worth more than
In the offshore non-deliverable forwards, the
one-month contract was at 54.97, while the three-month contract
was at 55.49.
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 $54.8975 with a total traded volume of $5.20 billion.
(Editing by Prateek Chatterjee)