Indian rupee closed lower on Wednesday, after a fall in local share prices raised concerns foreign funds may pull out. The partially convertible rupee ended at 44.49/50 per dollar, weaker than the previous day's close of 44.46/47, but firmer than an intraday low of 44.57.
On Monday, it had fallen to 44.695, its lowest since December 21. "The rupee closely tracked share prices. Though it recovered towards the close, there are still worries of dollar buying by foreign funds in the coming sessions if shares fall further," a private bank trader said. Foreign funds have bought nearly $1.1 billion of local shares in 2007, but were net sellers of about $225 million so far in March.
Foreign buying of close to $8 billion of Indian shares during 2006 was a key factor in pulling the rupee up from a three-year low of 47.04 in July last year. The rupee hit a 16-month high of 44.03 last month, but gave up gains on suspected central bank intervention, traders said.
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