MUMBAI: The Indian rupee eased on Tuesday tailing losses in other Asian currencies and a choppy domestic sharemarket that failed to provide direction. At 10:59 a.m. (0529 GMT), the partially convertible rupee was at 44.405/41 per dollar from Monday's closing of 44.35/36, after moving in a tight range of 44.4075-44.51.
"There was a lot of (dollar) buying in the morning, but all along a flat market," said a senior trader at a state-run bank. Oil is India's biggest import and refiners are the largest buyers of dollars in the domestic currency market with their demand tending to peak at the end of each month when they are required to make payments.
The dollar held just a yen above its 1995 record low against the Japanese currency on Tuesday, prompting Japanese policy-makers to remind the market that Tokyo might intervene if pushed to stop its currency from rising. Dealers said they were also watching the Coal India IPO outflows expected in the first week of November. Coal India's $3.5 billion IPO, the country's largest, was more than 15 times subscribed last week, giving the government power to price the issue at the top of its range and building momentum for other state offers.
The world's largest coal miner would begin to refund excess subscriptions for the IPO, which had an institutional order book of about $27 billion powered by foreign funds, by late October or early November and most traders expect the rupee to weaken towards 45 at that time. Indian shares seesawed as lower Asian peers made investors wary [.BO]. Foreign investments in shares now stand at a record $24.4 billion, compared with $17.5 billion last year.
One-month offshore non-deliverable forward contracts were quoted at 44.63, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX and the United Stock Exchange was at 44.4250, with the total traded volume on the three exchanges at $1.4 billion.
