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Rediff.com  » Business » rupee ends tad weaker; FOMC minutes in focus

rupee ends tad weaker; FOMC minutes in focus

Last updated on: April 09, 2014 18:25 IST

Rupee graphThe Indian rupee ended a touch weaker on Wednesday despite domestic shares hitting record highs as caution prevailed ahead of the release of minutes from the US Federal Reserve's March meeting.

Foreign investors have been active buyers of debt and equities since March, and net purchases in April alone have already totalled $933.67 million, according to the market regulator's data.

The rupee had touched an eight-month high of 59.5950 on April 2, before giving up some gains, with the Reserve Bank of India also suspected of having bought dollars to replenish its foreign exchange reserves.

"The market expectation broadly is that the FOMC minutes will be less hawkish than the press conference in March," said Nizam Idris, a strategist with Macquarie Capital in Singapore.

The partially convertible rupee closed at 60.14/15 per dollar compared with 60.11/12 on Monday. Financial markets were closed on Tuesday for a local holiday.

The rupee rose to the session high of 59.80 as the BSE index rose as much as 1.77 percent to an all-time high of 22,740.04, while the NSE index rose as much as 1.7 percent to a record high of 6,808.70.

However, gains were capped ahead of the Fed's minutes given continued concerns about when the central bank will start to raise interest rates as it unwinds its asset-purchase programme.

Some dealers also cited dollar buying by state banks for defence purposes.

In the offshore non-deliverable forwards, the one-month contract was at 60.62, while the three-month was at 61.37.

Image: The rupee had lost three paise to close at 60.11 against the dollar on Monday; Photograph: Reuters

Archana Narayanan in Mumbai
Source:
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