Tactical dollar buying by oil firms and importers dragged the Indian rupee lower from a four-month high on Tuesday, but gains in domestic shares and broad dollar weakness underpinned sentiment. The partially convertible rupee closed at 45.67/68 per dollar, after hitting 45.49, its highest since May 14 and marginally stronger than Monday's 45.70/71 close.
At the day's high, the rupee was up 3.5 percent so far in the month and had gained 2.3 percent in 2010. Last year, the rupee had strengthened 4.7 percent on fund inflows of a record $17.5 billion. One-month offshore non-deliverable forward contracts were quoted at 45.83, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and the United Stock Exchange closed at 45.7250, 45.72 and 45.72, respectively, with the total traded volume on the three exchanges at about $8.9 billion.
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