The rupee ended weaker after choppy trade on Monday but off lows set early in the day, as demand from foreign institutional investors offset the early impact of broad-based strength in the dollar. The rupee closed at 43.50/51 per dollar, slightly weaker than Friday's close at 43.4625/4725 but off a low of 43.59 set in early trade, when the local unit was weighed down by the dollar's strong gains against major currencies.

The Indian government is due to unveil its annual federal budget at the end of the month.

The rupee opened nearly a third of a percent weaker on Monday, after signals at the weekend from US Federal Reserve chairman Alan Greenspan that the US economy's structural imbalances could improve sent the dollar to three-month highs against the euro.

But the rupee found support at its lows, as banks bought on behalf of their foreign institutional investor clients and exporters chose to cash in their dollars rather than see rupee appreciation eat into their remittances, dealers said.

Copyright Reuters, 2005