Mumbai: The rupee weakened on Tuesday on customary month-end dollar buying by refiners to pay for imports, but higher share prices helped check its losses.
The partially convertible rupee ended at 48.10/11 per dollar, about 0.3% weaker than its previous close of 47.97/98.
The rupee market was closed on Monday for a regional holiday and is shut again on Wednesday for the fiscal half-year book closing. “There was heavy buying of dollars by refiners. Stock market gains were not enough to offset them,” said a senior trader with a foreign bank.
Oil refiners, who are the largest buyers of dollars in the local market, tend to pump up dollar purchases at the end of each month when they have to make import payments. India imports more than two-third of its oil requirements.
Indian shares climbed nearly 1% on Tuesday to their highest close since the market had ended at a 16-month high last week as confidence in a global economic recovery boosted markets across Asia.
The main share index has soared about 75% this year, making it one of the best performing indices in Asia.
Foreign funds have moved $3.6 billion into Indian equities so far this month, taking their net total investment since the start of January to nearly $12 billion.
One-month offshore non-deliverable forward contracts were quoting at 48.10/20, close to the onshore spot rate.
In the currency futures market the most traded near-month contracts were at 48.10 on the National Stock Exchange and MCX-SX, little changed from Friday’s 48.09.