At 9:57am, the partially convertible rupee was at Rs48.72/74 per dollar, compared with Thursday’s close of Rs48.68/69
Mumbai: The Indian rupee fell for the second straight day on Friday as dollar demand from state-run banks for oil and defence-related import payments outweighed expectations for foreign fund flows into shares.
At 9:57am, the partially convertible rupee was at Rs48.72/74 per dollar, compared with Thursday’s close of Rs48.68/69.
“There appears to be a short-term import demand in the last 2-3 days, possibly defence related,” a dealer with a private sector bank said.
He said any correlation to shares or global currency movements would be muted until the one-off demand for dollars was out of the way.
The rupee has moved in a wide range this week but is up 1.5% from Rs49.47 hit on Monday, which was its weakest since 15 May. The unit strengthened to Rs48.47 during trade on Thursday, its highest since 7 July.
Foreign flows into stocks have underpinned the rupee. The main index rose more than 1% early, following stronger Asian shares. The Morgan Stanley Asian index excluding Japan was 0.6% higher at 10:27am.
Foreigners have bought shares worth more than $1 billion this month, taking their net purchases in 2009 to $6.1 billion. The inflow has been a key driving force, pushing up the rupee from record lows of 52.2 hit in early March.
Dealers said oil companies were also stocking up taking advantage of lower global oil prices and a stronger rupee.
Crude future were trading at $61.55 a barrel, compared with around $70 in the beginning of this month.
