MUMBAI: Rupee pulled back from the session's low on Wednesday as exporters selling dollars aided, but remained weak on the back of high demand for the greenback from oil importers and negative shares, that accentuated foreign fund outflow fears.
The rupee ended at 50.7750/7850 to the dollar, weaker than Tuesday's close of 50.735/745, after touching a low of 51.02.
"There were some corporates selling dollars, which helped the rupee to recover some of the losses," said Hari Chandramgathan, a dealer at Federal Bank.
Traders expect the rupee to weaken in the next couple of sessions, given continued dollar demand from oil importers to meet month-end commitments, and squaring-off of positions before the end of the financial year on March 31.
The unit is likely to trade in a 50.50 to 51.20 range till Friday, a trader with a state-run bank said, adding the market will keenly watch for any Reserve Bank of India intervention in the foreign exchange market.
The RBI sold a net $7.3 billion in January in the spot market, after sales of $7.8 billion in December. However, it has maintained it does not target any particular exchange rate and intervenes only to smooth volatility.
India's main stock index ended 0.8 pe cent lower, with lenders leading the losses, as worries over higher cost of funds and heavy government borrowing in the fiscal first-half weighed on investor sentiments.
The one-month offshore non-deliverable forward contracts were at 51.35. 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 all ended around 51.2, on a total volume of $4.7 billion.
