Indian rupee ends lower as investors cover dollar shorts ahead of key rate meetings

The Indian rupee finished lower on Tuesday as investors squared off their short dollar positions ahead of the rate decisions by the US Federal Reserve and the European Central Bank. After an extended weekend, the rupee closed at 81.88 against the greenback. Public sector banks buying dollars for the Reserve Bank of India, as inflows rose, was another reason for short dollar positions becoming covered, traders said. The Fed’s two-day meeting is scheduled for later in the day and is expected to raise rates by 25bps.