Rupee down on oil firm buys; local shares eyed

Rupee down on oil firm buys; local shares eyed

Mumbai: The rupee weakened once again on Thursday afternoon, after briefly erasing early losses, due to likely buying from state-run oil refiners.

In rest of trade, traders said, movement in local shares and the dollar overseas would be key for direction.

At 2:25pm, the partially convertible rupee was at 45.03/05 per dollar, against 44.945/955 at close on Tuesday.

Earlier in the day, the rupee had recouped losses made in early trade tracking a rebound in local shares and on news Libya had agreed to a peace plan, traders said.

Oil fell over $3 on Thursday after the head of the Arab League said a peace plan for Libya, proposed by Venezuela President Hugo Chavez, was under consideration.

Crude oil is India’s biggest import and state-run oil refiners are the largest buyers of the dollar in the domestic currency market.

The index of the dollar against six major currencies was up 0.1% at 76.757 points. On Tuesday, at the end of local forex market, the index had been at 76.836 points.

The one-month onshore forward premiums were at 25.00 points against 25.50 points on Tuesday.

The one-month offshore non-deliverable forward contracts were quoted at 45.28, 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 45.2550, with the total traded volume at about $6 billion.