Mumbai: The Indian rupee was little moved on Thursday, with dealers saying the market was caught between the prospect of strong overseas interest in Indian equities and the spectre of central bank intervention.
At 9:50 a.m. (0420 GMT), the partially convertible rupee was at 39.305/315 per dollar, slightly softer than the previous finish of 39.28/29.
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 $1-$2 billion so far this year.
“So far the central bank has been able to defend the 39.30 level, but as we move closer to the Reliance IPO, perhaps it won’t be that easy, or at least it will be a lot more expensive,” said a dealer with a private bank.
Reliance Power, is set to raise up to $3 billion in an initial public offer next week, which would be India’s biggest-ever IPO, and currency dealers expect a net of about $1 billion to flow in from overseas investors.
Sentiment was slightly cautious after Asian markets eased on Thursday despite a late Wall Street rally, on worries about global growth after Goldman Sachs forecast a US recession this year, helping gold hold near record highs.
But dealers also focused on the rise in the Indian benchmark share index, which hit its fifth record high in as many days in early deals on Thursday.
Traders also looked on likely outcomes of policy meetings of the Reserve Bank of India and the US Federal Reserve at the end of the month.