Mumbai: The rupee remained weak on Thursday on the back of weak local shares, a stronger dollar overseas and high oil prices, but external commercial borrowings (ECB) related dollar inflows limited a further downside.
At 2:40pm, the partially convertible rupee was at Rs 45.1225/1300 per dollar, weaker than Rs 45.00/01 at close on Wednesday.
Traders expect the rupee to trade in a narrow band of Rs 45.00-45.20 intraday.
Indian shares slipped as intense fighting in Libya sent oil prices higher, pulling down world equities.
Brent crude rose for a second day on Thursday to surpass $116 after forces loyal to Libyan leader Muammar Gaddafi bombed oil industry infrastructure, inflicting longer-term damage on the country’s exporting capacity.
The euro fell to a one-week low on Thursday after credit agency Moody’s cut Spain’s rating, and the currency could head lower on mounting worries about how the euro zone will deal with the debt crisis on its periphery.
The index of the dollar against six major currencies was up 0.40% at 77.019 points and would be watched for direction during the day. The index had been at 76.686 points when the rupee market closed on Wednesday.
The one-month onshore forward premium was at 28.00 points against 26 points on Wednesday, and the one-year premium was at 276.75 points from the previous 278.25 points.
The one-month offshore non-deliverable forward contracts were quoted at 45.41, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, were all at 45.2900, with the total traded volume at about $3.9 billion.