Mumbai: The Indian rupee backed away from one-week lows after global oil prices dropped, easing concerns of a widening trade deficit but worries about rising outflows from local shares was seen limiting gains.
At 10.20 a.m., the partially convertible rupee was at 43.1275/1325 per dollar, 0.2% stronger than 43.23/24 at close on Tuesday. It hit a 15-month low of 43.50 earlier this month.
“The market is probably celebrating the fall in oil prices, but the negative factors like outflows from the stock market and the political uncertainty still remain,” a senior dealer with a private bank said.
“The rupee should trade in a broad range of 43.05 to 43.20 for the rest of the session,” he added.
India imports more than two-thirds of its oil needs and high oil prices widen the country’s trade deficit, putting downward pressure on the local currency.
Crude oil was trading below $139 a barrel, after falling more than $6 on Tuesday, its biggest single day fall in 17 years.