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Rupee ends lower at 46.80/$

The Indian rupee ended Tuesday slightly lower on importer demand, with persistent dollar sales by state-run banks limiting the decline, dealers said.

The rupee opened weaker on a technical adjustment to compensate for a shift in the spot settlement date to Friday, due to a US markets holiday later this week, and was under pressure through the day, they said.

The rupee ended at 46.80/805 per dollar compared to Monday's close of 46.765/775.

Dealers said the rupee's relative strength against currencies of its trading partners other than the United States attracted active importer bids for dollars.

"There were more than usual importer queries today," a dealer with a state-run bank said.

Dealers estimate the rupee is overvalued almost 2 per cent on a trade-weighted basis at its current levels.

Firm global oil prices and uncertain foreign portfolio flows also weighed on rupee sentiment.

Currency traders see the rupee range-bound in the next few days as India's improved foreign exchange reserves weigh against the market going long on dollars.

Central bank data released on Saturday showed foreign exchange reserves rose to $35.413 billion in the week ended November 10 from $34.737 billion a week ago, driven by inflows from the State Bank of India's Millennium Deposit scheme, which raised $5.5 billion from expatriate Indians.

INTRA-DAY REPORT: The Indian rupee was slightly weak against the dollar in early trade on an adjustment for a shift in the spot settlement date to Friday, due to a US markets holiday later this week.

At 9:15 a.m. (0345 GMT), the rupee was quoted at 46.785/795 to the dollar after opening 46.765/785. It closed on Monday at 46.765/775.

US markets are closed on Thursday for the Thanksgiving Day holiday.

Dealers said the rupee was likely to remain around current levels. The country's higher level of foreign exchange reserves, following multi-billion dollar inflows from the State Bank of India's Millennium Deposit scheme, would weigh against the market going long on dollars, they said.

"I see levels above 46.81 as opportunities to sell dollars," a dealer with a private bank said.

But despite the improved sentiment on the rupee following the SBI deposit inflows, currency traders favoured a gradual weakening in the currency.

They said the rupee is overvalued almost 2 per cent on a trade-weighted basis due to the weakness in the euro and other Asian currencies against the dollar.

Firm global oil prices and reduced foreign portfolio purchases will also exert downward pressure on the rupee, they said.

Foreign funds sold Indian equities for a net $58.1 million last week, bringing down their net purchases for November to $169.1 million.

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