Mumbai: The rupee weakened more in afternoon trade on Monday after a six-day rally as a weaker euro and month-end oil importer demand for dollars hurt sentiment.
Oil is India’s biggest import item and domestic oil refiners are largest dollar buyers in local forex market.
At 1:24pm, the partially convertible rupee was at 44.8025/81 per dollar, 0.3% lower from 44.66/67 on Friday, when it had risen to 44.615, a level not seen since 4 January.
* The common European unit dipped on Monday after German Chancellor Angela Merkel’s conservatives lost a key state election and it could pull back towards $1.39 in the near-term, with the dollar supported after hawkish comments from some Fed officials.
The euro was at $1.4072, down from Friday’s close of $1.4074.
The index of the dollar against six major currencies was up 0.07% at 76.271 points after closing at 76.217 points on Friday.
However, gains in the local shares and year-end dollar inflows from corporate borrowing may limit the rupee’s losses, dealers said.
The one-month offshore non-deliverable forward contracts were quoted at 45.08, weaker than the onshore spot rate.
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 were all at 44.8250, with the total volume at about $4.40 billion.