* Rupee ends at 53.81/82 per dlr vs 53.765/775 on Monday
* Higher import tax to curb gold-related USD demand -
* RBS says expects meaningful rupee gains in Dec quarter
By Subhadip Sircar
MUMBAI, Jan 22 (Reuters) - The Indian rupee came off near
three-month highs to end lower on Tuesday after gains from the
government's move to raise the import tax on gold were erased by
dollar demand from state-run banks and weak equities.
The government, late on Monday, raised the import duty on
gold by 2 percentage points to 6 percent in a bid to curb
purchases and rein in the country's bloated current account
Gold-related dollar demand by importers constitutes an
important source of greenback demand in the foreign exchange
market, which dealers estimate at around $150-$170 million on a
Nomura said the move may help in part to lower the current
account deficit to 4.3 percent of GDP in FY14 from an estimated
4.9 percent in the current fiscal year.
The current account and fiscal deficits have been a drag on
the rupee and been a major worry for foreign investors.
"We need portfolio capital flows in line with easing of the
trade deficit for the rupee to appreciate," said Rajesh Cheruvu,
chief investment officer, India-private banking at RBS.
He expects the rupee to trade in a 53-55 range and only see
a meaningful rise in the December quarter, aided by a growth
The Indian government recently allowed refiners to raise
diesel prices in small measures, adding to the recent steps
taken to assuage foreign investor sentiment and rating agencies.
Finance Minister P. Chidambaram met investors in Hong Kong
on Tuesday as part of a four-city tour to boost capital inflows.
The partially convertible rupee closed at 53.81/82
per dollar, weaker than its 53.765/775 close on Monday. It rose
to 53.3750 earlier in the session, its highest level since Oct.
Indian shares snapped a three-day winning streak on Tuesday
after Hindustan Unilever earnings disappointed on
volume growth, ending 0.6 percent lower.
In the offshore non-deliverable forwards, the
one-month contract was at 54.04, 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
53.7525 with a total traded volume of $7.7 billion.
(Editing by Anupama Dwivedi)