* Rupee ends at 54.92/93 per dlr vs 54.86/87 on Monday
* Top econ adviser says current account deficit a key
* Euro gives up gains vs USD on reported selling by macro
By Subhadip Sircar
MUMBAI, March 5 The Indian rupee gave up early
gains to end lower on Tuesday, driven by a late fall in the
euro, with concerns over the country's current account deficit
expected to remain a major drag for the currency.
The government's top economic adviser, Raghuram Rajan, named
the record-high current account deficit as the main worry for
the country, reiterating the stance from Finance Minister
Palaniappan Chidambaram in his budget speech last week.
The Reserve Bank of India has also named the current account
deficit as a factor in its policy decisions, adding to these
"The short-term view is USD/INR should consolidate in the
54.30-55.00 area for an upmove towards 56.00 and higher by the
end of March 2013," said Ashis Barua, a senior forex dealer at
IndusInd Bank, citing the current account gap as a key reason
for his view.
The partially convertible rupee closed at 54.92/93
per dollar versus its previous close of 54.86/87 on Monday. The
unit had touched an intraday high of 54.61, primarily driven by
sharp gains in stocks.
Indian shares posted their biggest daily gains in three
months as global investors bet major central banks will keep
monetary policy loose at meetings this week. The rupee was also
helped by the euro which rose versus the dollar in early trade,
helped by slightly better-than-expected euro zone data.
The failure of USD/INR to break its 55-55.15 resistance zone
also helped expectations the rupee could see some support in the
However, a late fall in the euro on reported selling by a
macro fund and oil-related USD demand wiped out the rupee's
Concerns about the current account deficit are also expected
to linger, although some investors expect the RBI will still cut
interest rates later this month given the sharp slowdown in
growth and the government's commitment to meet its fiscal
In the offshore non-deliverable forwards, the
one-month contract was at 55.35 and 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 National Stock Exchange all closed
at 55.15 with a total traded volume of $4.9 billion.
(Editing by Subhranshu Sahu)