Mumbai, February 25: The rupee weakened on Thursday, weighed down by import payments and a firmer dollar overseas. Activity was light ahead of the national budget on Friday and seesawing shares.
At 10:27 a.m. (0457 GMT), the partially convertible rupee was at 46.40/41 per dollar, after opening flat at 46.32/33.
“There is not much activity now as everyone is looking at the budget. If there is a large increase in excise duty and corporate tax, stocks may fall sharply which may push the rupee down to 46.80,” said a dealer at state-run Union Bank of India.
Dealers said there was demand for dollars from importers who usually settle their payment at the end of each month.
“There are no flows in the market really to move the rupee. So traders are looking at the U.S. dollar overseas,” said a trader at a foreign bank.
The rupee touched a low of 46.44 early mostly on the dollar’s strength overseas.
The dollar index against six majors was up 0.33 percent. Most Asian currencies were flat or lower against the dollar.
Sterling extended its losses on Thursday to hit a nine-month low against the dollar after Bank of England policymakers this week left the door open to more asset purchases under quantitative easing.
Dealers expect the rupee to move in 46.30-46.50 band until the budget.
There was little direction from shares. The 30-share BSE index was down 0.2 percent, after opening up 0.2 percent.
One-month offshore non-deliverable forward contracts were at 46.44/54.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 46.2525.
—–PTI