Rupee trades at 42.50/51 per dollar

Written by Reuters | Mumbai, July 31: | Updated: Jul 31 2008, 21:06pm hrs
The Indian rupee was trading at the day's lows on Thursday as a rebound in oil prices renewed concerns of a widening trade deficit and refiners stepped up purchases to meet their month-end commitments.

At 3:06 p.m., the partially convertible rupee was at 42.50/51 per dollar, weaker than Wednesday's close of 42.36/37. It had risen to 41.82 per dollar last week, its strongest since May 12.

Oil, which hit 12-week lows on Tuesday, rose more than $4 a barrel on Wednesday after US gasoline stocks fell. It was trading just below $127 a barrel on Thursday [O/R]. India imports a majority of its oil needs, and higher prices widen the trade deficit.

In May, the trade deficit hit a record $10.77 billion as oil costs rose. For the first two months of the 2008/09 fiscal year, the deficit stood at $20.64 billion, sharply higher than $13.92 billion in the same period of last year.

Global stocks ticked higher on Thursday following a concerted central bank move earlier to boost liquidity, but a mixed set of corporate results in Europe and a rebound in crude oil prices kept a lid on gains.