Mumbai: The Indian rupee was little changed on Wednesday, 18 June, as traders scanned the stock market for clues on whether foreign funds were reviving purchases after a sell-off.
At 10:10am, the partially convertible rupee was at 42.875/885 a dollar, barely moved from Tuesday’s close of 42.885/895. It had hit a 13-month low of 43.21 last month.
“After a long time we saw some positive numbers yesterday from the foreign institutional investors,” said U. Venkataraman, head of treasury at IDBI Bank. “Offshore-onshore arbitrage has also cooled off and positive cues from Asian markets are keeping the rupee steady.”
India’s main share index opened up 0.3% after rising 3.3% in the previous two days.
Dealers said the rupee could strengthen to 42.80 if the stock market sustained the rise, while the downside remained at 42.95 as the RBI was expected to intervene to halt a slide.
The rupee has fallen nearly 8% in 2008 after foreign funds dumped shares worth $5.8 billion this year. In 2007, the rupee had gained more than 12% on foreign inflows of a record $17.4 billion.
One-month offshore non-deliverables forward contracts were quoting at 42.92/43.02, slightly weaker than the onshore rate.