The Indian rupee weakened on Thursday, hurt by dollar short-covering in later trade, but the local currency posted its second straight monthly gain on the back of continued buying of local shares by foreign institutional investors. The partially convertible rupee closed at 61.50/51 per dollar compared with its close of 61.235/245 on Wednesday. On the month, the unit gained 1.8 percent, after having surged 5 percent in September.
Traders said the rupee dropped in late trade on the back of short-covering ahead of the upcoming long weekend. Markets in India will be closed on Monday for a holiday.
"Market participants are mostly in a holiday mood so volumes have been low. A 61.25 to 61.85 range should hold for Friday," said A. Ajith Kumar, a senior foreign exchange dealer with Federal Bank. In the offshore non-deliverable forwards, the one-month contract was at 61.93, while the three-month was at 62.91.