The Indian rupee closed at its highest in more than a week on Wednesday as the local currency gained in anticipation of large dollar inflows from a software company, but suspected central bank intervention curbed gains.
Fund inflows into the record-breaking stock market and the dollar's weakness against the yen and other Asian currencies also supported the rupee. On Tuesday, Infosys Technologies Ltd said an issue of sponsored American Depository Receipts would amount to about $1.6 billion, and traders said the dollars were likely to hit the market later this week and early next week. The rupee ended at 44.79/80 per dollar, 0.16 percent stronger than Tuesday's close of 44.86/87.
"The Reserve Bank was very much there towards the end of the day," a dealer with a foreign bank said. "With inflows getting stronger, if they try to drive the dollar up further it will send the wrong signals," he said.
The rupee has witnessed wild swings over the last two weeks and traders said the central bank's hand was felt in a big way last week, when the rupee hit a eight-month high of 44.35.