* Rupee ends at 61.9275/9375 vs pvs close of 61.8150/8250
* Closes at its lowest level since Jan. 9
* Uncertainty prevails ahead of RBI review next week
By Subhadip Sircar
MUMBAI, Jan 23 The Indian rupee weakened
slightly to a two-week low on Thursday as importers stepped in
to buy dollars ahead of the end of the month amid rising
uncertainty before a key central bank policy review next week.
The rupee has avoided the heavy losses suffered by some
emerging Asian currencies such as the Philippine peso this year
because of its efforts to narrow the current account deficit,
and strong foreign investor inflows.
However, the market is mired in a new uncertainty by the
prospect of a period of sustained high interest rates after a
Reserve Bank of India panel recommended on Tuesday making taming
high inflation a priority.
That would help contain inflation but raise concerns about
economic growth in the near term. Trading is expected to be
rangebound until the RBI's policy review on Tuesday.
Although analysts had previously expected the central bank
to remain on hold, the recommendation to focus on consumer
inflation is raising the prospect of a rate hike.
"The rupee has been fairly rangebound today with some
month-end dollar demand from importers seen. Policy will be the
next key trigger. Until then, I expect a range of 61.80 to 62.20
to hold," said Hari Chandramgethen, head of foreign exchange
trading at South Indian Bank.
"Debt inflows have lost momentum but are expected to
continue for some more time," he added.
The partially convertible rupee closed at
61.9275/9375 per dollar compared with its Wednesday close of
61.8150/8250, marking its lowest close since Jan. 9.
Dollar purchases were seen during the session from oil
importers, while a large state-run bank was also a buyer, which
dealers attributed to meeting defence-related needs.
Broadly, the dollar gained against Asian emerging market
currencies as worries about a slowing Chinese economy deepened
and as investors braced for a further cut in stimulus by the
U.S. Federal Reserve.
In the offshore non-deliverable forwards, the
one-month contract was at 62.41 while the three-month was at
FACTORS TO WATCH
* Swiss franc gains after lending curbs; euro buoyant
* China PMI, Fed tapering views hits Asia FX
* Euro zone lifts mood after China disappoints
* Foreign institutional investor flows
* For data on currency futures
DIARIES & DATA:
Indian Data Watch European diary
Indian diary US Diary
(Additional reporting by Swati Bhat; Editing by Subhranshu