* Rupee ends at 54.4850/4950 per dollar vs 54.46/47 on
* November inflation eases to 7.24 pct, weakest pace in 10
* RBI likely to hold rates, view split on CRR - Reuters Poll
* Local shares end 0.46 pct higher
By Subhadip Sircar
MUMBAI, Dec 14 The Indian rupee fell to its
lowest in over a week on Friday after heavy dollar buying by a
large state-run bank wiped out all gains even as a below
expected inflation reading raised hopes that the central bank
could start cutting interest rates as early as January.
The dollar buying by the large-bank was likely related to
government defence purchases, several dealers said.
Earlier, data showed that wholesale price based inflation
eased, leading to gains in the equity market, and in the rupee
on hopes that along with the strong factory data, it would
bolster the case for the RBI to ease policy.
India's wholesale price index rose a slower-than-expected
7.24 percent in November, less than the 7.6 percent estimated by
a Reuters poll.
While most economists and market participants believe the
central bank may hold rates steady on Dec. 18., some are now
expecting that it will infuse some liquidity in the form of a
cash reserve ratio cut.
"The trending and expectation in headline inflation has
improved, paving way for start of rate cut cycle in
January-March 2013," said Moses Harding, head of asset liability
management at IndusInd Bank.
"A CRR cut of 25 basis points is seen certain to maintain
the positive feel," he said.
The government is trying to push through more reforms,
approving steps on Thursday to speed up infrastructure projects
and facilitate investment into the fertiliser sector.
Local stocks, which were trading flat before the
data release, ended 0.46 percent higher.
The partially convertible rupee ended at
54.4850/4950 per dollar, marginally weaker than its Thursday
close of 54.46/47. It fell to 54.70 in the session, its lowest
level since Dec. 4.
In the offshore non-deliverable forwards, the
one-month contract was at 54.74, 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 54.58, with total traded volume of $6.4 billion.
(Editing by Jijo Jacob and Anand BAsu)