MUMBAI: The Indian rupee weakened for a second day on Thursday, tailing a fall in the euro and shares that slipped on expectations for a rate increase at the central bank's policy at 0630 GMT.
At 11:21 a.m. (0551 GMT), the partially convertible rupee was at 44.89/90 per dollar, weaker than last close of 44.73/74.
Traders said volume was light with the Reserve Bank of India widely expected to nudge repo rate up by 25 basis points to stem inflation pressures. For a poll on the central bank likely rate action, see
"Euro is weak and equities are also not looking promising," said a foreign exchange dealer with a foreign bank.
"But we do not expect the rupee to weaken past 45 today. There is dollar selling interest around 44.90-44.95."
Traders said the rupee should move in 44.75-44.95 band, with support from custodian banks's dollar sales on behalf of foreign funds.
The euro was at $1.4109, against $1.4307 at end of local forex trade on Wednesday and the index of the dollar
against six major currencies was up 0.27 percent at 75.806 points.
The mains stocks index was down 0.4 percent, with financials, automakers and property developers subdued on rate rise worries.
The one-month onshore forward premium was at 24.25 points versus 25.50 at last close. The three-month was at 74.75 points from 78 and the one-year was at 252.50 points versus 268.75.
One-month offshore non-deliverable forward contracts were quoted at 45.14, weaker than the onshore spot rate.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange , the MCX-SX and on the United Stock Exchange were all at 44.9825, with total volume at $2.40 billion.
