Rupee seesaws as stocks fail clarity

The rupee seesawed on Monday as shaky domestic equities failed to offer clarity on the direction of fund flows to edgy traders, with dollar sales by exporters keeping the local unit from falling sharply.
The partially convertible rupee closed at 50.09/10 per dollar, off a low of 50.25 and little changed from its previous close of 50.04/05. It had hit a record low of 50.60.
The main share index shed 0.14 % on Monday, with the U.S. government’s rescue package for troubled Citigroup bolstering the market after a weaker start.
Foreign fund selling of local shares has reached a net $13.6 billion so far in 2008. Foreigners had bought a net $17.4 billion last year. Dealers said they expected the central bank would try to stop the rupee weakening past 50.40 per dollar, prompting exporters to come in and sell dollars from around 50.20.
The central bank usually buys and sells dollars via state-run banks. India’s foreign exchange reserves fell by $5 billion to $246.35 billion in the week to Nov. 14, central bank data showed. Economists said most of the fall appeared to be due to the central bank’s intervention. One-month offshore non-deliverable forward contracts were quoting at 50.90/51.95 per dollar, weaker than the onshore spot rate, indicating a bearish outlook for the currency in the near term.