Re weak on month-end $ demand

The rupee ended down against the US dollar today as banks bought the greenback to meet month-end demand from oil companies and other importers.

The currency ended at 43.93, compared with 43.78 on Thursday, after moving in the range of 43.70-43.96.

“The pressure on the rupee may continue due to weak fundamentals and constant (dollar) demand from oil companies,” said R K Gurumurthy, head of trading, ING Vysa Bank.

“There was strong buying by some oil companies around 43.82-43.84 towards the end of trading. They were also seen earlier in the day at different levels,” said a dealer at a state-run bank.

Noting the consistent demand from oil companies and other importers, banks rushed to cover their short-dollar positions, weakening the Indian unit further against the greenback in the last few minutes of trade. “Market players (banks) who were short (on dollars) started covering their positions around 43.85-43.89, which weakened the rupee more at the end,” said a dealer at a UK bank.

The government bonds ended up today but gave up some of the intraday gains towards the fag end of trade. Fears of a cut in banks’ statutory liquidity ratio caused investors to trim portfolios.