The Indian rupee hit a 13-month low near 43 per dollar on Friday after data showed inflation at a 3-year high, but recovered smartly to end stronger as exporters decided it was good time to cash in dollar holdings. The partially convertible rupee ended at 42.53/54 per dollar, off an intraday low of 42.92, which was its weakest since April 12, 2007, according to Reuters data.
It had closed at 42.75/76 on Thursday. The market is closed on Monday for a holiday. At its low, the rupee was down 8.2 percent in 2008, weighed down by worries of slowing growth, rising inflation, record oil prices and the risk of foreign investors withdrawing funds. The rupee had risen more than 12 percent against the dollar in 2007.
"It was a mixed bag. Lot of two-way interest. We have seen a lot of (dollar) selling by exporters," said Agam Gupta, head of forex trading at Standard Chartered, adding that he expected oil companies to buy dollars when the market re-opens on Tuesday. Oil, India's biggest import, hit record highs above $127 a barrel on Friday, raising the risk of the trade deficit widening. India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars.
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