The Indian rupee slid to a near-three-month low on Tuesday weighed by dollar demand from oil importers, while choppy local shares and worries over global growth kept risk appetite subdued. The rupee ended at 51.475/485 to the dollar, weaker than Monday's close of 51.14/15, after touching a low of 51.495, a level last seen on January 16.
India's balance of payments slipped into negative territory for the first time in three years and the current account deficit widened to $19.6 billion in December quarter from $9.7 billion a year earlier. A sustained fall in the rupee is, however, unlikely as traders expect the Reserve Bank of India to step in to shore up the currency. The RBI is suspected to have sold dollars on Monday, helping the rupee pull off the day's lows.
The central bank bought $1.1 billion and sold $1.4 billion in the spot market in February, data released on Monday showed. The one-month offshore non-deliverable forward contracts were at 51.93. In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and on the United Stock Exchange all ended around 51.7, on a total volume of $3.7 billion.
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