Mumbai: The rupee rose marginally on Thursday helped by dollar sales by exporters, but demand for the US unit from oil companies and losses in the domestic share market prevented stronger gains.
The partially convertible rupee closed at Rs48.77/78 per dollar, 0.1% stronger than its previous close of Rs48.82/83.
”Good flows were seen today both ways, but the rupee is still range bound between Rs48.70-49.20. It has to break out of this range for any further direction,” the chief dealer with a state-run bank said.
”There was demand from oil companies in the morning which pushed the unit lower, but then exporters came in and sold dollars helping it recover,” he added.
Dealers said the choppy share market provided few cues on the direction of fund flows. Indian shares .BSESN snapped a two-day rise and fell 1.2% on weak global sentiment and lingering economic worries.
Foreign fund flows have been a key factor driving the rupee in recent years. So far in 2009 foreigners have sold shares worth a net $1.1 billion, after dumping more than $13 billion last year. The rupee lost 19.1% in 2008.
The dollar’s weakness against the euro in late trade also helped sentiment for the rupee.
The euro edged up against the dollar in nervous trade on Thursday as investors stayed sidelined ahead of the European Central Bank’s interest rate decision.