Mumbai: Rupee eased on Thursday as the spectre of a US recession and central bank intervention weighed on sentiment, though investment flows for share offerings capped losses, dealers said.
At 10 am, the rupee was at 39.335/345 per dollar on Wednesday, softening from the previous close of 39.29/30 as it drifted away from a decade-high of 39.16 hit in November.
“The IPO flows are likely to ease off over the next day or two, and with the stock market being battered a bit, the market is poised for the rupee to weaken a bit,” said the chief dealer with a foreign bank.
India’s benchmark share index moved up in early deals on Thursday but then weakened to extend its losses of past three sessions.
Dealers said flows for Reliance Power’s initial share offering would continue till Friday. The $3 billion IPO was covered more than 10 times on its first day on Tuesday.
Dealers also kept a watchful eye on the central bank, which is widely believed to have bought about $5 billion in the past two weeks in a bid to prevent the rupee from rising past it’s November peak.
Data released on Wednesday showed the central bank bought $7.8 billion trying to stem the rupee’s rise in November, taking its intervention to $72.1 billion in the first 11 months of 2007.