MUMBAI, Dec 29: The Indian rupee erased losses to close little changed on Monday as late gains in the local share market boosted hopes of fresh capital inflows.

The partially convertible rupee closed at 48.41/44 per dollar, off a low of 48.75 and almost matching Friday’s close of 48.44/45 as month-end dollar demand from importers prevented a sharper rise.

The overall dollar weakness and the gains in stocks are seen supporting the rupee.

There was also some month-end dollar demand to be noted, a senior dealer at a private bank said, adding thin trade of around 25 per cent of the daily average made it hard to analyse the near term direction.

Choppy shares snapped a four-day slide and rebounded 2.2 per cent as investors scooped up beaten down stocks on hopes for a rate cut, while outsourcer Satyam rose in anticipation of moves to shore up investor sentiment

Foreign funds have dumped $13.3 billion worth of Indian shares so far in 2008, after buying a record $17.4 billion last year. However, they have been buyers of $365.6 million worth of shares so far in December.

Dealers said a rise in oil prices also weighed on the rupee.

Oil is India’s biggest import and refiners are the largest buyers of dollars in the domestic currency market, with their demand tending to peak at the end of each month when they make payments for their imports. —Reuters