Rupee edges up against dollar
Indian rupee rises slightly as dollar slips against major currencies on Monday.india Updated: Aug 21, 2006 19:36 IST
The Indian rupee edged up slightly on Monday as the dollar slipped against major currencies on expectations the U.S. Federal Reserve may not raise rates next month.
But the local currency's gains could be checked as corporates and oil companies are expected to buy dollars if the rupee strengthens further.
At 9:40 a.m., the partially convertible rupee was at 46.42/43 per dollar, compared with Friday's close of 46.46/47.
"There will be some (dollar) buying interest if the currency moves up towards 46.40," a dealer with a state-run bank said, adding that the rupee could trade in a 46.38 to 46.46 range.
The Fed paused its rate-raising campaign this month due to easing inflation risks and a slowdown in the U.S. economy after 17 consecutive rates increase over two years.
Dealers said the strength of Asian currencies, after last week's surprise interest rate increase by China, is also supporting the rupee.
China lifted key one-year rates by 0.27 percentage point on Friday, renewing expectations that Beijing would be willing to tolerate a stronger yuan.
But a pick-up in oil prices could weigh on the rupee as India imports about 70 percent of its crude and higher prices mean more demand for dollars.
Oil was above $71 a barrel on Monday, bolstered by Iran's determination to continue with its atomic fuel programme ahead of a deadline from the United Nations to halt nuclear work.