The Indian rupee weakened on Monday as dollar needs of local oil companies weighed, but a much stronger-than-expected industrial output data boosted local equities and fund inflow hopes, helping deflect some pressure off the currency. The partially convertible rupee ended at 49.96/97 to the dollar, down from Friday's close of 49.84/85, after moving in a band of 49.85 to 50.01 in the day.
Most traders expect the local currency to move in a wide band of 49.80 to 51.00 until growth trajectory in Asia's third-largest economy becomes clear through the Reserve Bank of India's policy review on Thursday and the federal budget for the next fiscal year on Friday. So far this year, the rupee has added about 6 percent compared with a steep drop of around 16 percent in 2011.
The one-month offshore non-deliverable forward contracts were at 50.44. In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and on the United Stock Exchange all ended at around 50.2, on a total volume of $4.5 billion.
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