The Indian rupee ended slightly lower on Thursday after trading in a thin band through the day as demand for the greenback from importers to meet month-end commitments weighed despite the dollar's weakness against other Asian units. Sentiment was also cautious ahead of the release of July-September economic growth data on Friday and the Reserve Bank of India's monetary policy review on December 2. Traders said the long Thanksgiving holiday weekend in the United States also likely led to lower activity in the onshore foreign exchange market.
However, some volatility could be seen on Friday after the outcome of a meeting among members of the Organisation of the Petroleum Exporting Countries on possible production cuts. Traders expect the rupee to hold in a tight 61.70 to 62.10 range until the policy review on Tuesday and hold in a 61.50 to 62.50 range until the end of the year. "The rupee has not depreciated to the extent of the rise in the dollar index. This makes Indian exports less competitive and the rupee prone to quick depreciation in case of any risk-off trade as India runs a current account deficit," said Murthy Nagarajan, head of fixed income at Quantum AMC. The partially convertible rupee closed at 61.8750/8850 per dollar versus Wednesday's close of 61.8450/8550. In the offshore non-deliverable forwards market, the one-month contract was at 62.13, while three-month was at 62.67.
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