MUMBAI: The Indian rupee fell on Friday, snapping four sessions of gains, as profit-booking hit global risk assets and as hopes of substantive policy reforms faded as a political deadlock continued in parliament.
Dealers said bunched up dollar-demand was seen from oil importers after a two-day bank strike hit volumes on Wednesday and Thursday. Oil-refiners meet most of their dollar demand from state-run banks, which were most affected by the strikes.
The rupee kept a tight range throughout the session, mirroring the limbo in global markets given some doubts about whether the European Central Bank or the Federal Reserve would step in to support their respective economies.
In India, parliament has been at a standstill this week because of the uproar over the controversial coal concessions given to private companies, raising fears of a delay in key reforms including fiscal consolidation.
"There are no definite signs that the rupee can strengthen further. The parliament logjam and the poor monsoon has kept the rupee on tenterhooks," said Satyajit Kanjilal, chief executive at Forexserve, a forex advisory firm.
The partially convertible rupee closed at 55.4950/5050 per dollar as per the SBI closing rate, weaker than its close of 55.26/27 on Thursday.
However, the rupee ended the week with gains of 0.4 percent.
The euro eased against the dollar as investors took profits on Thursday's rally to a seven-week high, although lingering optimism that policy makers are moving closer to tackle the debt crisis limited losses.
Global risk factors will remain key for the rupee in the week ahead, especially in the lead-up to April-June economic growth data on Aug. 31.
The rupee could also come under pressures as oil refiners are likely to bid for dollars next week, in the last week of the month. Typically oil-related dollar purchases spike towards the end of the month from importers looking to meet commitments.
The one-month offshore non-deliverable forward contracts were quoted at 55.78 while the three-month was at 56.43.
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 closed at around 55.48, w i th a total traded volume at $3.5 billion.
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