The rupee traded in a narrow band to end little changed on Thursday, with the central bank suspected of mopping up dollar inflows, dealers said.
The partially convertible rupee ended at 39.285/295 per dollar—a shade softer than the previous finish of 39.28/29.
“The fact that the rupee held steady despite the Sensex falling nearly 300 points shows that the market believes we’re going to see some strong inflows,” said a dealer with a foreign bank, referring to India’s benchmark share index.
The rupee hit a peak of 39.16 in November, its highest in almost 10 years. Suspected central bank intervention has blocked attempts to test that level this week, and dealers said the central bank has bought around $3 billion (Rs11,790 crore) so far this year. Dealers paid scant attention to the decline in the local equity market that fell sharply after hitting its fifth record high in as many days in early deals, focusing instead on a slew of initial public offerings (IPOs) that should generate strong overseas interest. Reliance Power Ltd is set to raise up to $3 billion in an IPO next week.