The Indian rupee eased on Friday, after trading in a narrow band for most of the session, driven lower by dollar purchases by oil refiners and as dealers unwound positions in the local unit ahead of the weekend.
The partially convertible rupee ended at 40.77/78 per dollar from Thursday's 40.71/72. It has been trading in a 40.50-41.25 range since the central bank knocked it from a nine-year high of 40.28 in late May. "There wasn't much happening today, looks like the market is resigned to trading within a band for the time being," said a dealer with a foreign bank.
Dealers said that state-run banks were seen buying dollars when the rupee moved towards its intraday peak of 40.69, though the market was unsure if the purchases were on behalf of the central bank. The Reserve Bank of India (RBI) has been suspected of intervening to keep the rupee below 40.50 since end-May, but has been widely suspected of selling rupees every time it tests 40.70 over the past week, perhaps indicating a lower tolerance level for the local unit's strength, dealers said.
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