by FP Staff Dec 28, 2012 01:01 IST
MUMBAI (Reuters) - The rupee fell after two sessions of gains on Thursday, tracking lower stocks and as oil refiners bought dollars, with the local currency headed to end the year with losses.
Concerns about slowing growth continue to dog the rupee's fortunes with policy makers raising doubts about whether the once red-hot economy can even muster an 8 percent average growth.
Prime Minister Manmohan Singh dubbed a five-year plan for average growth of 8 percent "ambitious" and warned that business-as-usual policies won't deliver higher growth.
The rupee's outlook over the next few days could be determined by global currency movements as efforts to solve the so-called U.S. "fiscal cliff" are expected to continue, although the unit could see some support from dollar sales by exporters.
"We might see some (dollar) sales in the last two days as some bunched up EEFC funds are likely to hit the market," said Hari Chandramgathan, chief forex dealer at South Indian Bank, referring to dollars that exporters park in designated accounts.
The partially convertible rupee closed at 54.93/94 per dollar versus its Wednesday close of 54.8350/8450. It traded in a 54.72-54.9850 range in the session.
Local shares gave up early gains to end lower on the back of volatility tied to the expiry of monthly derivatives at the end of the session. .BO
End-of-month dollar purchases by oil refiners also weighed on the rupee.
The rupee remains the third worst performer among Asian currencies in 2012 tracked by Reuters after the Japanese yen and Indonesian rupiah.
The weakness also reflects worries about India's current account and fiscal deficits, which helped send the rupee to a record low in June, and comes in spite of capital inflows that have topped $24 billion in 2012, with over $4 billion in December alone.
In the offshore non-deliverable forward market, the one-month contract was at 55.21 while the three-month was at 55.73.
In the currency futures market, the most-traded near-term dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange closed at around 55.25 with a total traded volume of $3.2 billion.
(Editing by Subhranshu Sahu)
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