The Indian rupee dropped on towards 49 per dollar on Wednesday, weighed by demand for the US unit from oil firms and importers, although gains in shares to three-week highs offered some support. The partially convertible rupee closed at 48.93/94 per dollar, 0.4 percent weaker than its previous close of 48.75/76. On August 17, the rupee had dropped to a one-month low of 49.01.
"The market was short dollar at around 48.80 levels, and then the dollar started rising versus some majors, so there was rapid short-covering, mainly by importers on account of it being month-end," a senior dealer with a foreign bank said.
One-month non-deliverable forward contracts were quoted at 48.98/49.08, weaker than the onshore spot rate. In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX closed at 48.9450 each, with the total traded volume on the two exchanges at about $2.2 billion.