MUMBAI (Reuters) - The rupee pulled back from its worst weekly fall in 14 months on Monday and strengthened past 45 to the dollar, supported by the U.S. unit's broad losses against major currencies and a recovery in domestic shares.
At 10:20 a.m. (0450 GMT), the partially convertible rupee was at 45.00/01, off a high of 44.94 and 1 percent stronger than 45.48/49 at close on Friday.
Last week, the rupee fell 2.5 percent, its worst performance since the week of March 1, 2009, when it had dropped 3 percent, a couple of days before hitting its record low of 52.2.
"Hearing of good dollar inflows, so heavy selling going through. The non-deliverable forwards are also quoting lower," said Vikas Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank.
"At around 44.90-95 levels oil bids will hold the market," he said.
Oil is India's biggest import and refiners are the largest buyers of dollars in the local currency market.
One-month offshore non-deliverable forward contracts were at 45.01, almost at par with the onshore spot rate. In recent weeks, the offshore rate has usually been weaker, suggesting a change in outlook for the rupee.
The BSE Sensex was trading up 1.4 percent, joining a rebound in Asian stocks on a massive stabilisation plan for the euro zone to keep Greece's fiscal woes from spreading.
Capital flows into the local sharemarket are a key factor boosting the rupee. So far in 2010, foreigners have bought a net $6.2 billion, adding to record inflow of $17.5 billion last year.
The euro rallied on Monday on news of the emergency package for Greece, although there was scepticism whether the rise can be sustained.
Most Asian currencies jumped against the dollar. The index of the dollar against six major currencies was down 1.1 percent.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 45.0725, with the total traded volume on the two exchanges at about $1.8 billion.
(Reporting by Swati Bhat; Editing by Ranjit Gangadharan)
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