Indian rupee on Wednesday closed at three-week high against US dollar amid a gush of foreign inflows to acquire stakes in local companies.
Rupee closed at 71.36 a dollar, up 0.19% from Tuesday's close of 71.50. The Indian unit had opened 71.44 a dollar.
Analysts expect around $6 billion foreign inflow this week on account of the ArcelorMittal-Essar Steel deal. Ujjivan Financial Services Ltd.’s unit Ujjivan Small Finance Bank Ltd. plans to raise as much as Rs750 crore by selling new shares in an initial public offering.
Traders also eye key gross domestic product data for September quarter, due on Friday. GDP growth is likely to slow to 4.6%, the least since the first three months of 2013, according to a median of estimates polled by Bloomberg.
"Rupee is getting supported by foreign inflows coming in on account of corporate acquisitions and to participate in various share sales"gind, says Ankur Jhaveri, head of currency and equities at Edelweiss Financial Services in Mumbai
The yield on the 10-year Indian government bond was at 6.47% compared with its previous close of 6.48%.
In the year so far, the rupee has weakened 2.21%, while foreign investors have bought nearly $12.77 billion in Indian equities and $4.58 billion in debt.
Asian currencies were trading mixed. Malaysian ringgit was up 0.29%, China renminbi 0.13%, Philippines peso 0.10%, Taiwan dollar 0.03% and Hong Kong Dollar 0.01%. However, Singapore dollar was down 0.13%, China Offshore 0.10%, South Korean Won 0.10%, Japanese Yen 0.08%, Thai Baht 0.06% and Indonesian Rupiah 0.05%.
The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.32 against the previous close of 98.25.
(Bloomberg contributed this story.)