The Indian rupee slid for a fifth day on Monday and hit its lowest level in more than two-and-a-half months, weighed down by heavy dollar buying by oil refiners, with gains in the euro failing to offer much respite. Traders said the absence of any large dollar supply in the market led to exaggerated moves in the dollar/rupee.
"The rupee broke the key resistance of 55.80 today, so 56 looks quite likely in the near-term, possibly as early as tomorrow," said Subramaniam Sharma, director at Greenback Forex. Traders said they were also watchful of any central bank intervention after it was believed to have stepped in on Friday to prevent a sharp fall in the rupee. The next key resistance for the rupee is at 56.03, the low on September 6, traders said.
The partially convertible rupee closed at 55.73/74 per dollar, 0.35 percent weaker than its Friday's close of 55.5350/5450. The unit had dropped as low as 55.89 during the session, its weakest since September 6. In the offshore non-deliverable futures market, the one-month contract was at 56.04 while the three-month was at 56.61.
The one-month onshore forward premiums rose as high as 32 points, its highest in a week and compared with 29.50 points on Friday as lack of dollar supply in the system pushed up premiums. 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 closed at around 56.69 with a total traded volume of $7.7 billion.
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