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Friday, 26 November 2010 01:09 - - {{hitsCtrl.values.hits}}
MUMBAI (Reuters) - The Indian rupee strengthened on Thursday as exporters and corporates sold dollars after stops got triggered, prompting banks to liquidate long dollar positions with inflows towards an upcoming share sale also helping.
The partially convertible rupee closed at 45.515/525 per dollar, 0.4 percent stronger than 45.695/705 at close on Wednesday, when it had touched 45.8350, its lowest since Sept. 21
“Exporters were offering to sell dollars in the later part of the day. Present levels look comfortable with the one-year forwards totalling 47.50,” said Vikas Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank.
The one-year onshore dollar premium rose to 210.75 points from 204 points on Wednesday, with the outright forward rate at 47.6225.
State-run Manganese Ore India Ltd plans to raise $276 million via an initial public offering starting on Friday and closing on Dec. 1.
“Inflows will be there for the initial public offering but issue size is very small, so huge flows may not be there,” Chittiprolu said.
Dealers said choppy domestic shares failed to provide any clear direction on capital flows.
Shares fell 0.7 percent to their lowest close in more than two months as a new corruption scandal rocked the country, hitting shares of banks and other companies allegedly involved in exchanging bribes for large corporate loans.
However, foreign portfolio investors have snapped up a record $28.5 billion worth of Indian equities so far this year, in addition to last year’s $17.5 billion.
The dollar’s index against six major currencies was down 0.1 percent when the rupee market closed. One-month offshore non-deliverable forward contracts were quoted at 45.82, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contract on the National Stock Exchange, MCX-SX and United Stock Exchange closed at 45.6075, 45.61 and 45.61 respectively, with total traded volume on the three exchanges at an average 6.3 billion
