Rupee weakens as dollar rises

Rupee weakens as dollar rises

Mumbai: The rupee stalled below four-week highs and then weakened on Tuesday as the dollar’s rise in offshore markets prompted a wave of importer selling and a flat sharemarket weakened support.

The partially convertible rupee ended at 46.30/31 per dollar, off an early high of 46.13 and about 0.20% weaker than Monday’s close of 46.20/21.

On Monday, the rupee had touched 46.0 during trade, its strongest since 20 October.

“A strong dollar influenced the rupee’s fall. Flows were brisk today so it couldn’t recover," said a senior dealer with a foreign bank.

The dollar rebounded from the previous session’s 15-month lows after Federal Reserve chairman Ben Bernanke said the US central bank was “attentive to implications of changes in the value of the dollar."

The BSE share index stretched a winning run into a third day with a 0.1% gain, after the market spent most of the day in negative territory.

Foreigners have bought more than $15 billion worth of shares so far in 2009, after selling more than $13 billion last year. The inflows have helped the rupee recover from a record low of 52.2 in March.

One-month offshore non-deliverable forward contracts were quoting at 46.27/37, slightly stronger than the onshore spot rate.

In currency futures, the most traded near-month contracts on National Stock Exchange and MCX-SX were at 46.32 per dollar, from Tuesday’s 46.3925 and 46.3950 respectively.