MUMBAI (Reuters) - The rupee stayed weak in afternoon trade on Monday dragged by euro's retreat and domestic oil companies' demand for dollar for import payments. * At 1:33 p.m., the partially convertible rupee was at 44.4025/4050 per dollar, weaker than Friday's close of 44.3625/3725. * The local currency had moved in a narrow band of 44.39-44.4350 so far in trade, and is expected to stay below 44.45 intraday aided by positive local shares and Asian currencies. * Caution before the central bank's policy review on Tuesday could also keep rupee in tight band intraday, traders said. * The euro was at $1.4351 versus $1.4402 at close of forex trade on Friday, while the index of the dollar against six major currencies was up 0.03 percent at 74.224. The index was 74.068 at end of domestic currency trade on Friday. * Fear over the impact of the deadlock in U.S. debt ceiling talks on the dollar also shored up rupee's losses, traders said. * A sharply divided Congress pursued rival budget plans on Sunday that appeared unlikely to win broad support, pushing the United States closer to a debt default that would reverberate around the world. * The local benchmark share index was up 0.14 percent in choppy trade. * Oil is India's biggest import item and local oil companies are the largest purchasers of the dollar in the domestic currency market. * Brent crude oil futures fell $1 to $117.67 a barrel on Monday as worries about U.S. debt were exacerbated by Congress talks grinding to a halt over the weekend. * The Reserve Bank of India is expected to raise its key policy rate by 25 basis points on Tuesday after inflation quickened in June and may hike once more by the end of the year, before pausing its long tightening campaign, a poll of economists by Reuters showed last week. (Reporting by Aditya Phatak; Editing by Subhadip Sircar)
