20000122

Indian rupee seen weak but ranged, losses limited

BOMBAY: The Indian rupee is seen in a weaker range against the dollar but dealers expect the losses to be limited.

Oversold dollar positions putting pressure on the rupee but import hedging still limited, dealers said.

Dealers said they expect state-run banks also to step in and check the fall if the rupee weakens to 43.60.

Stop-losses and an easier interest rate outlook keeping the bias on forward premiums soft, dealers said.

Market is rife with talk of likely rate cuts by the Reserve Bank of India (RBI). The government cut rates on its small savings schemes by 100 basis points last Friday but most banks are still waiting for a signal from the RBI before cutting rates.

The rupee ended on Thursday at 43.57/575 per dollar compared with Wednesday's close of 43.55/555.

The six-month forward premium ended unchanged at 3.00 percent annualised, off the day's low of 2.98.-Reuters