Mumbai: The Indian rupee pared early gains on Monday afternoon as shares dropped raising concerns about foreigners pulling out funds, while month-end import payments also weighed on the unit.
At 2:00pm, the partially convertible rupee was at Rs48.22/23 per dollar, unchanged from Friday’s close. The unit earlier rose to as much as 48.0850 tracking gains in Asian sharemarket.
Crude is India’s biggest import, and refiners are the largest buyers of dollars in the domestic currency market. Demand tends to be higher during month-end, when importers pump up purchases to make payments for their imports.
The main share index was down 0.6%.
The central bank holds its quarterly monetary policy review on Tuesday at 11:15am, and analysts expect it to leave key rates unchanged.
One-month offshore non-deliverable forward contracts,were quoting at Rs48.23/33, little changed from the onshore spot rate, indicating near-term support.
In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX was quoting at Rs48.2325 and Rs48.23 respectively, with the total traded volume on the two exchanges at about $1.1 billion.