MUMBAI: Rupee firmed slightly on Tuesday, finding support as local shares snapped a three-day losing streak but then contained by demand for dollars from crude refiners.
The partially convertible rupee ended at 46.80/81 per dollar, off an intraday low of 46.86 and slightly above its previous close of 46.84/85. "There was reasonable demand from refiners, which cut the rupee's strength. For tomorrow, I have a forecast in the range of 46.75 and 46.85," said a senior trader with a foreign bank.
The benchmark share index rose 0.55 percent. A rise in the stock market normally supports the rupee on a view that it could attract foreign buying, although there has been concern that into year-end foreigners may repatriate some funds. Until mid-December, foreigners were buyers of a net $16 billion worth of Indian equities this year, according to Nomura.
That buying has helped lift the rupee off a record low of 52.2 per dollar in early March. Foreigners sold more than a net $13 billion of shares last year, when the rupee fell by a fifth. Local refiners bought dollars through the session, limiting the rupee's rise.
Oil is India's biggest import and refiners are the largest buyers of dollars in the local market. One-month offshore non-deliverable forward contracts were quoted at 46.81/91, close to the onshore spot rate. In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at 46.82 and 46.83 respectively.
Source : The Economic Times