MUMBAI, July 28:The Indian rupee weakened on Monday, after having risen in early trade, as oil refiners bought dollars in the local currency market to meet month-end import commitments.

The partially convertible rupee ended at 42.55/56 per dollar, down 0.7 per cent from Friday’s close of 42.26/27 and off an early high of 42.1950. It rose to 41.82 per dollar last week, its highest since May 12.

The rupee weakened mainly due to month-end dollar demand from oil companies. There was some major inflow in between which gave the rupee interim relief but again (oil) demand picked up,” said V. Rajagopal, head of forex trading at Kotak Mahindra Bank.

Indian shares rose 0.52pc on Monday in choppy trade, led by Larsen & Toubro and Reliance Industries, as investors braced for a possible increase in official interest rates on Tuesday.

Foreigners selling their local portfolio holdings have weakened a key support for the rupee in recent times, helping push the local unit down 7.4pc so far in 2008.—Reuters