Rupee weaker as concerns of outflow weigh

Rupee weaker as concerns of outflow weigh

Mumbai: The Indian rupee continued to trade weaker in the afternoon session on Friday tracking a choppy domestic sharemarket and amid concerns of foreigners repartiating funds post the Coal India’s share allocation.

State-run Coal India’s $3.5 billion IPO, the country’s largest, was more than 15 times subscribed on Thursday, its final day for subscription, powered by an institutional order book worth about $27 billion from foreign funds.

The Coal India IPO refunds would be made by late October or early November and traders expect the rupee to drop to 45 levels.

State-run Power Grid Corp, Steel Authority of India and Indian Oil Corp are some of the companies that are planning large share sales in coming months, which could attract more foreign fund inflows.

At 3:10pm, the partially convertible rupee was at Rs44.53/54 per dollar, down from Thursday’s close of 44.30/31.

Choppy domestic shares added to the rupee’s downside. Indian shares were down 0.4%.

The dollar pared its losses on Friday on wariness over whether any clear agreement would be reached at a Group of 20 meeting, as the United States called for countries to avoid using their currencies to gain an economic advantage. The dollar index against six major currencies was up 0.1%.

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were all at 44.57, with traded volume on the three exchanges at a moderate $5.5 billion.