MUMBAI: The Indian rupee fell on Monday as oil importers bought dollars and shares were choppy ahead of factory output data due around 11 a.m. (0530 GMT) that is expected to show the first contraction in more than two years.
At 10:25 a.m. (0455 GMT), the partially convertible rupee was at 52.36/37 per dollar, weaker than Friday's close of 52.03/04. It is seen moving in a range of 52.00 to 52.40.
"The expectations of a negative industrial production numbers are keeping the sentiments bearish," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank.
"Persistant bidding by oil companies and choppy local shares are also seen weighing," he said.
Industrial output likely shrank 0.5 percent in October from the same month a year earlier as export growth slowed, a Reuters poll showed.
Last week, the Times of India newspaper quoted an unnamed source as saying factory output fell 7 percent in October, dragged down by a drop in the capital goods sector.
India imports more than three-quarters of its oil requirements and local refiners are the biggest buyers of dollars in the domestic currency market.
Traders said the rupee was also dented by concerns about the economy after the finance ministry last week cut its economic growth forecast for the current fiscal year to around 7.5 percent, sharply lower than the original estimate of 9 percent.
Reserve Bank of India Governor Duvvuri Subbarao said last week the central bank would intervene in the foreign exchange market only to manage volatility.
The rupee hit a record low of 52.73 on Nov. 22 and has shed more than 14 percent of its value this year to remain the worst performer among major Asian currencies.
Indian shares drifted lower after opening higher, ahead of a weak industrial output data, and as concerns around faltering growth mounted.
One-month offshore non-deliverable forward contracts were quoted at 52.35, in-line with the onshore spot rate.
The one-month onshore forward dollar premium was at 32.75, compared with 31.00 on Friday, while the three-month was at 75.25, from 77.25, and the one-year premium was at 220, lower than 226.25.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 52.49. Total volume was $980 million.
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