* Rupee ends at 60.03/04 per dlr vs 60.1550/1650 on Monday
* INR falls to 60.55/dlr intraday, lowest since April 29
* RBI sold dlrs via state banks at 60.49 rupee levels
* INR can trade higher towards 59.50/80 levels - trader
By Neha Dasgupta
MUMBAI, June 17 The Indian rupee snapped two
sessions of falls and recovered from a near two-month low on
Tuesday after the central bank was spotted selling dollars via
state-run banks and its governor assured markets that India was
better prepared to deal with external shocks.
Foreign banks also sold dollars on behalf of exporters,
which aided the rupee's gains, traders said.
Earlier in the day, Reserve Bank of India Governor Raghuram
Rajan said the country is watching the Iraq situation, but
despite the uncertainty the domestic economy is better prepared
to deal with any shocks on the external front.
"We have sufficient reserves, the current account deficit is
low. So I think one shouldn't worry too much about the external
side at this point," Rajan said on the sidelines of an industry
The rupee fell as low as 60.55, a level last seen
on April 29, prompting the central bank to sell dollars through
state-owned banks around 60.49 rupee levels, traders said.
"Nationalised (state-run) banks sold dollars at higher
levels, may be to check sharp depreciation. The rupee can trade
higher towards 59.50/80 levels as exporters are likely to sell
dollar above 60 levels," said Hari Chandramgethen, head of
foreign exchange trading at South Indian Bank.
The partially convertible rupee ended at 60.03/04
per dollar versus its previous close of 60.1550/1650 on Monday.
Earlier in the day, the local currency traded marginally
stronger in the spot offshore NDF market, prompting
traders to sell dollars in the domestic spot market to narrow
the differential. The spot NDF in Singapore were at 60.07/10 at
the time of rupee's close.
Oil futures fell towards $112 per barrel, pressured by signs
of a thaw in relations between Iran and the West although market
players saw scope for gains if violence in Iraq threatened
production from OPEC's second-biggest producer.
India imports nearly two-thirds of its oil needs, leaving
its currency especially vulnerable to price swings.
For the near-term, traders expect the rupee to trade in a
59.90-60.30 range. Traders will await the outcome of the U.S.
Federal Reserve's two-day meeting on Wednesday to get cues on
the timing of interest rate hikes.
In the offshore non-deliverable forwards, the
one-month contract was at 60.41, while the three-month was at
FACTORS TO WATCH
* Aussie falls after RBA minutes, pound pauses
* Risk aversion plus caution ahead of Fed weigh on Asia FX
* M&A talk lifts stocks, Iraq tensions ease slightly
* Foreign institutional investor flows INFII INFII01
* For data on currency futures INRFUTURES
DIARIES & DATA:
Indian Data Watch ECONIN European diary WEU/EQTY2
Indian diary IN/DIARY US Diary US/DIARY
(Editing by Subhranshu Sahu)