Rupee eases for 2nd day; shares, refiners weigh

Rupee eases for 2nd day; shares, refiners weigh
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First Published: Wed, Feb 24 2010. 06 06 PM IST
Updated: Wed, Feb 24 2010. 06 06 PM IST
Mumbai: The rupee weakened for a second straight day on Wednesday, as a fall in local share prices and customary month-end dollar buying by refiners underpinned sentiment.
The rupee ended at 46.32/33 per dollar, off an early low of 46.35 and about 0.2% lower compared to its 46.23/24 close on Tuesday.
“The fall in shares was the dominant factor. Oil companies also pushed the rupee lower with import-related demand,” said a senior trader with a foreign bank, adding he expected the rupee to trade in the 46.20 to 46.40 range on Thursday.
The BSE benchmark share index Sensex snapped a two-day rise and fell 0.2% tracking weak global markets. Foreign portfolio inflows are a key driver of the local currency.
Traders said dollar demand from refiners also weighed on the rupee. Oil is India’s biggest import and refiners are the largest buyers of dollars in the local currency market.
Demand for dollars tends to peak at the end of each month, when importers make payments.
One-month offshore non-deliverable forward contracts were quoting at 46.35/40, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both quoted at 46.2525.
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First Published: Wed, Feb 24 2010. 06 06 PM IST
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