* Rupee ends at 53.68/69 per dlr vs 53.665/675 on Weds
* Forex and debt mkts closed on Fri for local holiday
* RBI eases rules for FII investment in debt, aids rupee
By Swati Bhat
MUMBAI, Jan 24 (Reuters) - The Indian rupee was weighed down
by strong dollar demand from oil firms on Thursday but the
central bank's notification of the increase in foreign
institutional investment limits in debt prompted some dollar
selling by exporters.
India's central bank relaxed some of the rules for foreign
institutional investors (FIIs) buying into domestic debt as part
of the government's long-expected $10 billion increase in
corporate and government debt limits.
The increase in FII limits will bring in more dollar inflows
and help the rupee, prompting some exporters to liquidate their
dollar holdings at current levels, traders said.
The rupee is expected to trade in a range until the Reserve
Bank of India's critical policy review on Tuesday, when the
central bank is widely expected to cut interest rates by 25
basis points. Forex markets will be closed on Friday for a local
"There weren't too many flows today but oil demand was seen
all day. News about the hike in FII limits in bonds helped the
rupee, though actual flow still needs to come. These are only
sentiment boosters," said Hari Chandramgethen, head of foreign
exchange trading at South Indian Bank.
"The rupee is likely to be in a range of 53.55-54.30 next
week as some nervousness before policy can be expected," he
The partially convertible rupee closed at 53.68/69
per dollar versus its previous close of 53.665/675. The unit
moved in a wide range of 53.62 to 53.8950.
Traders said there was strong dollar demand from oil
refiners, whose demand typically tends to peak at month-ends,
when they are required to make import payments.
Some traders were also seen covering their short dollar
positions ahead of the long weekend.
Shares fell as Tata Motors Ltd
slumped after the company issued a profit warning at its key
Jaguar Land Rover unit.
In the onshore forwards market, the one-year premium
rose to 335 points from 329.75 points on Wednesday
while in the offshore non-deliverable forwards, the
one-month contract was at 53.90 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
53.6950 with a total traded volume of $6.50 billion.
(Editing by Jijo Jacob)