Mumbai: The rupee weakened for a second day on Thursday, tailing a fall in the euro and shares that slipped on expectations for a rate increase at the central bank’s policy.
At 11:21am, the partially convertible rupee was at Rs 44.89/90 per dollar, weaker than last close of Rs 44.73/74.
Traders said volume was light with the Reserve Bank of India widely expected to nudge repo rate up by 25 basis points to stem inflation pressures. For a poll on the central bank likely rate action, see
“Euro is weak and equities are also not looking promising,” said a foreign exchange dealer with a foreign bank.
“But we do not expect the rupee to weaken past 45 today. There is dollar selling interest around 44.90-44.95.”
Traders said the rupee should move in 44.75-44.95 band, with support from custodian banks’s dollar sales on behalf of foreign funds.
The euro was at $1.4109, against $1.4307 at end of local forex trade on Wednesday and the index of the dollar against six major currencies was up 0.27% at 75.806 points.
The mains stocks index was down 0.4%, with financials, automakers and property developers subdued on rate rise worries.
The one-month onshore forward premium was at 24.25 points versus 25.50 at last close. The three-month was at 74.75 points from 78 and the one-year was at 252.50 points versus 268.75.
One-month offshore non-deliverable forward contracts were quoted at 45.14, 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 on the United Stock Exchange were all at 44.9825, with total volume at $2.40 billion.