India rupee strengthens on IPO-related inflows

A man counts Indian currency notes inside a shop in Mumbai, India, August 13, 2018. REUTERS/Francis Mascarenhas/File Photo

The Indian rupee rose on Wednesday aided by IPO-related inflows and strength in the Chinese yuan.

The rupee was at 83.3025 against the US dollar as of 11:20 am IST, higher by 0.1% compared with 83.3550 close in the previous session, its lowest closing level on record.

IPOs worth $900 million are lined up in the local market this week, including that of engineering firm Tata Technologies which opened for subscription on Wednesday.

State-run banks were seen offering the USD/INR, a foreign exchange trader at a foreign bank said.

While most Asian currencies weakened, the offshore Chinese yuan climbed and was hovering close to its strongest level in nearly four months.

The dollar index edged higher to 103.65 but has fallen near 3% in the month so far but the rupee has largely remained in a narrow band.

The rupee is "trying to catch on" to the risk-on mode seen globally aided by IPO-inflows, but the respite could be short-lived, said Arnob Biswas, head of foreign exchange research at SMC Global Securities.

On Wednesday, the US 10-year yield held flat at 4.41% in Asia trade after minutes of the US Federal Reserve's Oct 31-Nov 1 meeting showed officials agreed they would proceed "carefully," and only raise interest rates if progress in controlling inflation faltered.

Investors now await initial jobless claims data due in the US later in the day.

The data is expected to show that claims rose to 231,000 in the week ended Nov. 18, according to a Reuters poll, up from 226,000 in the preceding week.