MUMBAI: The rupee erased intraday gains on customary month-end dollar buying by refiners on Monday, but the dollar's broad weakness against the yen and a positive close of local stocks limited the fall.
The partially convertible rupee ended at 46.91/92 per dollar, slightly weaker than Friday's close of 46.89/90. It traded in a range of 46.76 to 46.93 during the session.
"Month-end dollar buying from refiners is there. We see an opening of 46.99 to 47.03 tomorrow. We expect dollar selling to come in around 47.15 levels," said Naveen Raghuvanshi, group associate vice president at Development Credit Bank in Mumbai.
"Refiner demand would continue tomorrow as well," he added. Oil is India's biggest import and refiners, the largest buyers of dollars in the domestic currency market, step up purchases towards month end to meet import commitments.
The dollar's fall overseas limited the rupee's losses. The yen rose broadly after the Bank of Japan failed to signal aggressive monetary easing steps at an emergency meeting.
The dollar index was flat at the time of the local market's close.
India's benchmark BSE share index ended 0.2 per cent stronger, supported by global stock markets. Foreign investors have purchased shares worth a net $12.7 billion so far in 2010, adding to a record $17.5 billion inflows in 2009.
One-month offshore non-deliverable forward contracts were quoted at 47.08, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX ended at 47.1075 and 47.11 respectively, with the total traded volume on the two exchanges at about $4 billion.
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