The Indian rupee snapped a four-week falling streak while also gaining slightly on the day as continued foreign fund inflows into debt and equity markets helped offset demand for the greenback from importers. The rupee has been trading in a tight range in recent sessions and is expected to continue to do so until the federal budget on July 10.
Traders said there was good demand from importers, particularly oil firms, to meet month-end import commitments, preventing the rupee from rising sharply. "In the run-up to the budget INR will continue to trade in the range of 59.80-60.60," said Pramod Patil, assistant vice president, foreign exchange and fixed income at United Overseas Bank.
"Though the medium-term outlook is tilted towards slight strengthening of the INR, in the short term INR is likely to remain on an easing bias due to higher crude oil prices caused by the Iraq crisis," he added. The partially convertible rupee closed at 60.0850/0950 per dollar compared with 60.14/15 on Thursday. The unit moved in a tight range of 60.0650 to 60.15 during the session.
The unit gained 0.17 percent on the week, snapping a four-week falling streak. Traders will continue to monitor the evolving global geopolitical situation and the domestic share market for clues in the near-term. In the offshore non-deliverable forwards, the one-month contract was at 60.41, while the three-month was at 61.
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