The Indian rupee fell on Monday, dragged by choppiness in the euro ahead of a key regional summit this week, although traders said easing dollar demand from oil importers limited losses in the local currency. Comments by a top official of the Reserve Bank of India on Saturday that the bank will use all available tools to stem a fall in the rupee if the currency's downward spiral escalates also capped losses, traders said.
The partially convertible rupee ended at 51.41/42 per dollar, 0.4 percent weaker than Friday's close of 51.20/21 and moved in a band of 51.23 to 51.4650 during the day. "It will be difficult for rupee to now move beyond 52 per dollar unless there is a very big negative trigger since the RBI has made its stance on rupee very clear," said Uday Bhatt, senior manager of dealing at UCO Bank.
The euro was at $1.3433 at end of rupee trade versus $1.35 on Friday, while the index of the dollar against six major currencies was at 78.483 points from 78.158 points. The one-month offshore non-deliverable forward contracts were quoted at 51.72, indicating a bearish near-term outlook. The one-month onshore forward dollar premium was at 27.75 points from 28.50 on Friday, the three-month was at 70 points from 67.25 points, and the one-year premium was at 211 points, from 198.50.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and the United Stock Exchange ended at 51.6275 and on the MCX-SX they ended at 51.6225. The total volume was at $3.42 billion. The Indian currency market is closed on Tuesday for a religious festival.