Rupee ends little changed as dollar selling meets demand
The partially convertible rupee closed at 61.53 per dollar compared to 61.54 on Wednesday. The unit moved in a narrow range of 61.51 to 61.71 during the session.business Updated: Jan 16, 2014 17:31 IST
The rupee ended little changed on Thursday as dollar demand from importers was adequately met by dollar selling by foreign banks, likely on behalf of clients looking to invest in the domestic debt market.
The partially convertible rupee closed at 61.53 per dollar compared to 61.54 on Wednesday. The unit moved in a narrow range of 61.51 to 61.71 during the session.
Bonds continued to gain for a fifth straight session with foreign funds having bought more than $2 billion worth of bonds so far in 2014.
Broad strength in the dollar versus most other regional and major currencies prevented the rupee from making sharp gains while sustained selling from foreign banks limited any sharp fall, holding the pair in a tight range.
"Today it was mainly the petro demand being met by custodian bank dollar sales, there was nothing major otherwise. Tomorrow, too, I expect range trading between 61.45 to 61.75 to continue," said Hari Chandramgethen, head of foreign exchange trading at South Indian Bank.
Losses in the domestic share market also prevented the rupee from gaining.
Indian shares ended marginally lower retracing from their highest levels in five weeks, as mobile carriers such as
Idea Cellular slumped on possible high bidding prices at a spectrum auction next month.
The US dollar held firm having returned to levels seen before last week's soft payrolls data as faith in the US economic recovery was restored, while the Australian dollar slid to a 3.5-year low after a dismal local jobs report.
In the offshore non-deliverable forwards, the one-month contract was at 61.88 while the three-month was at 62.69.