Rupee falls against dollar on dollar demand; eye government borrowing plan

. The rupee fell on Wednesday on the back of dollar demand from state-run oil refiners, with dealers awaiting the government's borrowing plans for the second-half of the year as a key indicator of its fiscal discipline.. The rupee's gains have also been kept in check after the euro fell to a two-week low, as Spain continued to dither over seeking a bailout, while popular opposition within the euro zone to austerity measures also unnerved investors.. "The government borrowing will be closely watched. If there is any additional borrowing, it will be negative for the rupee as it will be seen as a sign of fiscal slippage," said Uday Bhatt, senior manager of dealing at state-run UCO Bank.. He expects the rupee to trade in a 53.25-53.75 band till the end of September.. The partially convertible rupee fell to 53.51/52 to the dollar as per State Bank of India closing rate from Tuesday's close of 53.36/37.. It traded in a 53.425-53.63 range during the session.. Dealers cited good dollar demand from oil importers during the session, who were also active in the forwards markets, as they typically must settle trades by the end of the month.. Traders are also focused on the government and central bank meeting on Thursday to settle on October-March borrowing plans.. A Reuters poll showed the government was likely to borrow an additional Rs 50000 crore for the fiscal year, although it may decide to postpone announcing any changes to its current target of Rs 570000 crore.. Concerns about India's twin deficits, both on the current account and the fiscal side, had dragged the rupee to a record low of 57.32 in late June.. Some of these concerns have eased following a spate of government reforms this month, sparking a 3.8 per cent rally in the rupee so far this month.. USD/INR 1-month non-deliverable forwards were last trading at 53.74.. In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 53.75 with a total traded volume of around $4 billion.. Copyright @ Thomson Reuters 2012

Rupee falls against dollar on dollar demand; eye government borrowing plan

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