Rupee holds steady at 61.46, unchanged second time this month

The rupee ended unchanged against the dollar for the second time this month, holding steady at 61.46 today amid caution before next week's Reserve Bank of India (RBI) meeting and a weakening US currency overseas.

The Indian currency resumed lower at 61.50 per dollar from the previous close of 61.46 at the interbank foreign exchange market and dropped further to a low of 61.79 on dollar demand from banks and importers.

It recovered to 61.44 and ended at yesterday's closing level of 61.46 on dollar sales by banks due to weakness in the US currency in overseas, coupled with persistent foreign capital inflows into the local equity market.

The rupee closed unchanged at 61.79 against the dollar on October 8, a day after the RBI unexpectedly eased the rate at which it lends emergency funds to banks.

"The rupee continued to trade in a thin range today," said Abhishek Goenka, CEO of India Forex Advisors. "Next week will be important as the RBI monetary policy and FOMC meeting will be the key events."

The RBI policy meeting is scheduled on October 29, while the US Federal Open Market Committee (FOMC) will meet on October 29-30.

In the global market, the dollar extended its downward slide today on expectations the US Federal Reserve will continue its monetary stimulus, pushing the euro up further to its highest level since November 2011.

The dollar index, which tracks the performance of the dollar against a basket of six other major currencies, traded flat near yesterday's close as major US data are expected later today.

The 30-share S&P BSE Sensex fell 42 points to 20,683.52. Overseas investors bought a net Rs 991.83 crore yesterday, as per provisional data from the stock exchanges.

Forward dollar premiums were mixed. The benchmark six-month forward dollar premium payable in March softened to 213-215 paise from Thursday's close of 214-1/2-215-1/2 paise, while far-forward contracts maturing in September edged up to 439-442 paise from 439-441 paise.

The RBI fixed the reference rate for the dollar at 61.6250 and for the euro at 85.1350.
The rupee fell to 99.52 against the pound from yesterday's close of 99.39 and eased against the Japanese yen to 63.16 per 100 yen from 63.14.

However, it recovered to 84.79 per euro from the previous close of 84.83.