MUMBAI: The Indian rupee fell on Monday, posting its first quarterly fall in three, as suspected intervention by the central bank continues to prevent the currency from gaining much above 60 to the dollar.
The Reserve Bank of India has been frequently buying dollars ever since the rupee touched as much as 58.33 to the dollar on May 23, its highest in 11 months, in a bid to prevent the currency from appreciating too much.
That has prevented the currency from gaining much despite positive factors such as hopes for reforms sparked by the election of Narendra Modi as prime minister last month, which has spurred a surge in foreign investments.
The rupee is expected to remain range-bound until the Modi government delivers its first budget on July 10, which will provide a key test of its fiscal and reform credentials.
"It seems like RBI is accumulating (dollars) for reserves or companies accumulating for oil payments," said Anil Bhansali, vice president at Mecklai Financial.
"The pair is expected to remain ranged between 60.40-59.80 for the coming few sessions," he added.
The partially convertible rupee closed at 60.17/18 per dollar compared with 60.0850/0950 on Friday.
The unit fell 1.78 percent in June, marking its biggest monthly fall since August 2013, and 0.41 percent for the quarter.
Besides RBI intervention, concerns over global factors such as the violence in Iraq, hit the rupee in June.
Still, the rupee is up 2.72 percent so far this year, making it among the top performers among the Asian currencies tracked by Reuters.
Foreign funds have bought shares worth $2.32 billion and debt worth $3.07 billion so far in June, taking total inflows in the year to $9.92 billion and $10.66 billion respectively in the two segments.
In the offshore non-deliverable forwards, the one-month contract was at 60.40/50, while the three-month was at 61.00/10.
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