The Indian rupee fell sharply on Monday as domestic oil refiners stepped up dollar purchases given the recent run up in world oil prices, with a fall in local stocks adding to losses. But a sharper slide in the rupee was likely prevented due to continued robust capital flows into local equities and debt, traders said.
The rupee ended at 49.2150/2250 to the dollar, down from Friday's close of 48.935/945. It moved in a band of 48.9400 to 49.3050 during the session. "Equities moved deep into the red and there was dollar buying from importers, but I think weakness in rupee is likely to be very limited," said Naveen Raghuvanshi, associate vice president of foreign exchange trading at Development Credit Bank.
One-month offshore non-deliverable forward contracts were at 49.70. In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all ended around 49.62, on a total volume of $4.36 billion.
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