MUMBAI: The rupee eased slightly on Tuesday on customary month-end dollar buying by refiners, but the losses were checked by a rise in local equities to just shy of their 2009 highs and by gains in the euro. The partially convertible rupee ended at 46.66/67 per dollar, slightly weaker than Thursday's close of 46.65/66. Financial markets were closed on Friday and Monday for holidays. "Oil companies and other importers were buying dollars through the session.
The supporting factors today were the rise in local stocks and euro's gains," said a senior trader with a foreign bank. Oil is India's largest import and refiners are the biggest buyers of dollars in the domestic currency market.
Dollar demand from refiners tends to peak at the end of each month, when they are required to make payments for their imports. Traders said higher share prices supported the rupee and raised expectations of more foreign portfolio inflows in 2010.
The benchmark share index rose for a fourth straight session, falling just short of its 2009 high in intra-day trade but still posting its highest close since May 2008 on expectations of strong December quarter corporate earnings and improved economic conditions in 2010. The euro's rise also supported the rupee. The euro and currencies such as the Australian dollar rose against the dollar on an improved appetite for risk backed by stronger equities.
Source : The Economic Times