* Rupee ends at 53.86/87 per dlr vs 54.09/10 on Tuesday
* INR hits more than two-week high of 53.63 during trade
* Mth-end oil demand, defence buying pulls rupee off highs
By Swati Bhat
MUMBAI, Feb 27 (Reuters) - The Indian rupee rose on
Wednesday, touching an over two-week high at one point, on
optimism the government will deliver a fiscally disciplined
2013/14 budget, attracting more foreign flows into the country.
Investors are also hopeful the government will unveil
measures to boost investments on Thursday when Finance Minister
P. Chidambaram presents the budget for the year starting in
A government report on Wednesday said India was likely to
hit a fiscal deficit target of 5.3 GDP this year despite a
significant shortfall in revenue, adding there would be further
scope for monetary easing if the government continued with its
fiscal consolidation plan.
"INR rose as expectations are for an investor friendly
budget and not a voter friendly one. But there was oil and
defence demand in the late session which pulled rupee off
highs," said Uday Bhatt, a foreign exchange dealer with UCO
"I expect the rupee to hold in a 53.80 to 54.20 range until
the budget announcement tomorrow," he added.
Chidambaram is due to start presenting the 2013/14 budget in
parliament starting around 0530 GMT on Thursday.
The partially convertible rupee closed at 53.86/87
per dollar compared with its previous close of 54.09/10.
The unit rose as high as 53.63, its strongest since Feb. 11,
but retreated a tad on month-end dollar demand from oil
companies and defence-related firms.
Traders said a rebound in Indian shares from three-month
lows in the previous session also helped, as recent blue chip
underperformers rose on value buying.
Globally, risk assets recovered from Tuesday's losses after
Federal Reserve Chairman Ben Bernanke defended the U.S. central
bank's monetary stimulus, easing worries over a possible early
retreat from bond purchases.
In the offshore non-deliverable forwards, the
one-month contract was at 54.19 while the three-month was at
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 54.1750 with a total traded volume of $6.45 billion.
(Editing by Anand Basu)