Rupee largely steady in lacklustre trade

Rupee largely steady in lacklustre trade

Mumbai: The Indian rupee continued to trade marginally weaker in lacklustre trade on Thursday as month-end dollar demand from refiners was offset by gains in local shares and broad losses in the dollar versus majors.

Oil is India’s biggest import and refiners are the largest buyers of dollars in the domestic currency market with their demand tending to peak at the end of each month when they make payments on their contracts.

At 2:10pm, the partially convertible rupee was at 44.49/50 per dollar, weaker than its close of 44.445/450 on Wednesday.

Foreign portfolio investments of a record $24.7 billion in Indian shares so far this year have been a key driver for the rupee’s 4.6 percent rise in 2010.

Shares were trading up 0.6 percent after having briefly turned negative, with investors busy adjusting their positions on the last day for monthly derivatives contracts.

Traders said a broad drop in the dollar versus major units overseas prevented a further slide in the rupee. The index of the dollar against six majors was down 0.4 percent.

One-month offshore non-deliverable forward contracts were quoted at 44.83, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were all at 44.8075, with the total traded volume on the three exchanges at about $2.5 billion.