MUMBAI: The Indian rupee pared gains on Thursday as a slight rise in local shares was offset by dollar demand from oil refiners, and traders awaited the central bank's policy review on Friday for rate cues.
The partially convertible rupee ended at 46.35/36 per dollar, little changed from the previous close of 46.365/375. It strengthened as far as 46.1850 during trade before slipping to a low of 46.38 towards the close. On Wednesday, the rupee had hit 46.44, its weakest since Jan. 4, according to Reuters data.
"Refiners should buy dollars till tomorrow and we could see the rupee in the 46.30 and 46.50 range on Friday," said a senior trader with a private bank. Oil is India's biggest import and refiners are the largest buyers of dollars in the local currency market. Demand for dollars tends to peak at the end of each month, when importers make payments.
The benchmark BSE share index eked out a 0.1 percent rise after sliding 7.7 percent over the previous six sessions, but trading was choppy and volume light. Traders awaited the central bank's rate review on Friday, which could provide direction to the rupee in the coming weeks.
A Reuters poll showed 24 out of 25 economists expected the Reserve Bank of India to raise the CRR, the proportion of deposits that banks must keep with the central bank as cash, by up to 50 basis points in its policy meeting.
Source : The Economic Times