Mumbai: The Indian rupee snapped two sessions of falls on Monday on the back of dollar sales, likely on behalf of foreign investors who were looking to bid at the auction of unused limits in government and corporate debt taking place later in the day.

Traders said some custodian banks were also spotted selling dollars on behalf of foreign institutional investors, while the rupee also benefitted from sales of the US currency attributed to Bharat Petroleum Corporation Ltd’s recent $500 million dollar bond sale.

Flows and the global risk environment will likely remain the main drivers for the currency markets, with external commercial borrowings from various companies expected to hit markets in coming days and support the rupee.

Analysts see few domestic macro economic factors that can move the rupee ahead of the Reserve Bank of India’s policy review on 30 October, and broadly predict a 51.50 to 54.50 range for the rupee over the next few months.

“Foreign banks were among the major sellers today. There was some large corporate flow heard of in the morning and then some talk of the debt limit auction related flows," said Lata Subramaniam, deputy manager forex at State Bank of Travancore.

Subramaniam says she has an appreciation call for the rupee in the long-term, and expects 54.10-20 to be the top for the rupee this week, while on the downside, the cross could target 52.50, should it break below 53.40.

The partially convertible rupee closed at 53.47/48 per dollar, stronger than 53.84/85 on Friday.

The rupee also could have benefited from foreign investor-related flows into equity markets. The benchmark BSE index, Sensex, rose 0.59% after strong earnings from blue-chip companies such as Larsen and Toubro Ltd and Tata Consultancy Services Ltd.

In the non-deliverable forwards market, the one-month contract was at around 53.69 while the three-month was at 54.19.

In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange, all closed at around 53.51 with a total traded volume on the three exchanges at $5.8 billion. Reuters

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