"We are likely to see some more government stake sales and M&A deals, which will support the rupee," said Satyajit Kanjilal, chief executive at Forexserve, an advisory firm for corporates. The partially convertible rupee closed at 54.32/33 per dollar, weaker than its close of 54.26/27 on Tuesday. The rupee was also supported by an up to $1.1 billion share auction in state-run miner NMDC Ltd, which was fully covered, and by inflows related to Bharti Infratel's initial public offering process.
In the offshore non-deliverable forwards, the one-month contract was at 54.63, while the three-month was at 55.16. In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.47, with total traded volume of $4.1 billion.