The Indian rupee hit a one-week low on Wednesday, weighed down by losses in other Asian currencies and shares but good dollar inflows for a share sale helped the unit recover to end marginally higher on the day. Reliance Communications Ltd on Wednesday raised $804 million by selling shares, people involved in the process said, in what is the single biggest equity issue since the pro-business Narendra Modi government took office.
Dealers said the central bank has been persistently spotted buying dollars in the market to prevent dollar inflows from pushing the rupee sharply higher.
Traders expect the market to be range-bound until the federal budget on July 10.
"The budget is the next key event. The market will await the fiscal deficit numbers but it may not have a big impact on the rupee as such," said Pramod Patil, assistant vice-president, forex and fixed income at United Overseas Bank.
The partially convertible rupee closed at 60.1250/1350 per dollar compared with 60.1325/1425 on Tuesday. The rupee dropped to as much as 60.3850 during the session, its lowest since June 18.
In the offshore non-deliverable forwards, the one-month contract was at 60.48, while the three-month was at 61.07.
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