The Indian rupee dropped to its weakest in more than two months on Thursday after weak Chinese and euro zone manufacturing data hit demand for risk, but suspected dollar sales by the central bank pulled the currency back from the day's lows. Fears foreign investors would turn net sellers of Indian stocks also contributed to the rupee's fall after the prime minister's office moved to quell an outcry over a reported $211 billion loss in revenues from the sale of coalfields.
The partially convertible rupee ended at 51.17/18 to the dollar, after sliding to as low as 51.28 earlier, a level not seen since January 16. The unit had closed at 50.66/67 on Wednesday. Dealers said the Reserve Bank of India is likely to have intervened for a second in a session in a row to shore up the local currency, which has dropped around 2 percent in nearly a week.
The one-month offshore non-deliverable forward contracts were at 51.69. 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 all ended around 51.30, on a total volume of $6.69 billion.
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