Rupee appreciates to 45.43 against dollar

“Hearing of some inflows so there is dollar selling seen,but all eyes are on equities for clues,” said Vikas Chittiprolu,a senior forex dealer at state-run Andhra Bank. “Bidding interest will emerge at lower levels from oil companies and importers for month-end requirements.”

Oil is India’s biggest import and refiners are the largest buyers of dollars in the local currency market. Demand from oil firms and other importers tends to peak at the end of each month when they make payments for their imports.

Equities were trading 0.3 per cent higher with Reliance Industries and ICICI Bank leading the rise after Asian markets erased some early losses.

Foreign fund flows into the stock market are a crucial determinant of the rupee’s fortunes. Foreigners have so far in 2010 bought shares worth a net $3.5 billion,adding to record inflows of $17.5 billion seen in 2009.

The index of the dollar against six major currencies was down 0.3 per cent.

The euro edged up from a 10-month low after euro zone leaders agreed on a safety net for Greece which included the IMF,and the dollar backed off a two-month peak on the yen as Japanese exporters sold into its gains.

“It is reporting Friday today,so all eyes are on the Mibor fixing and on gauging what the state of liquidity is. Rupee should find resistance at 45.40 and the range would be up to 45.60 on the downside,” said R.K. Gurumurthy,head of treasury at ING Vysya Bank.

One-month offshore non-deliverable forward contracts were quoting at 45.53,weaker than the onshore spot rate.

In the currency futures market,the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were at 45.4400 and 45.4425 respectively,with the total traded volume on the two exchanges at about $1.2 billion.