* Rupee ends at 54.075/085 per dlr vs 54.185/195 on Monday
* Trade minister says govt unlikely to meet $350 bln export
* Dealers cite inflows related to debt auction limits for
By Subhadip Sircar
MUMBAI, Feb 20 The Indian rupee gained its most
in two weeks on Wednesday, largely aided by inflows related to a
debt auction, with volumes remaining low as most state-run banks
were thinly staffed due to a strike.
Dealers said the gain was due to foreign funds buying rupees
to participate in a debt-limit sale for foreigners, which they
need to subscribe to for buying local debt.
India will auction about $12.3 billion of limits, including
$10 billion of new government and corporate bond limits on
"Trading volumes were thin, which increases volatility. I
did not see much participation by refiners. The next trigger
will be the budget," said Naveen Raghuvanshi, associate
vice-president at Development Credit Bank in Mumbai.
The rupee has seen a small bounce since it hit a one-month
low in Monday's trading. Foreign investors have been jittery
ahead of the federal budget on Feb. 28, waiting to see whether
Finance Minister Palaniappan Chidambaram puts fiscal discipline
over election largesse.
Capital inflows have been supportive of the rupee, but the
economy's weak fundamentals will continue to weigh.
Trade Minister Anand Sharma said India was likely to miss
its $350 billion exports aim for the fiscal year.
Dealers said state-run banks had thin attendance due the
strike, which hurt market volumes.
The partially convertible rupee closed at
54.075/085 per dollar versus its previous close of 54.185/195, a
second session of gain. It rose 0.2 percent in trade, it biggest
daily rise since Feb. 5.
In the offshore non-deliverable forwards, the
one-month contract was at 54.38, while the three-month was at
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 54.18 with a
total traded volume of $4.6 billion.
(Editing by Prateek Chatterjee)