By Subhadip Sircar
MUMBAI, June 27 (Reuters) - The Indian rupee recovered from record lows on Thursday, helped by corporate inflows, with a lower-than-expected current account gap also helping relieve some of the concerns about the battered currency.
The central bank released the data a day ahead of schedule, which was widely interpreted as a move to calm nerves after the rupee went for a freefall in late session on Wednesday, slumping to a record low of 60.76 to a dollar.
India's current account deficit hit a record high 4.8 percent of gross domestic product in the fiscal year that ended in March, fuelled by rising imports of oil and gold, but was lower than an expected gap of 5 percent.
However, analysts are not overly enthused with the data. While the deficit is likely to narrow for the current fiscal year, its funding remains a concern on the back of foreigners pulling out of Indian debt and equities.
Overseas investors have taken out $7 billion in bonds and stocks in June, making the Indian rupee the worst performer in Asia this month.
'The overall CAD came in below 5 pct for the fiscal year which was lower than market expectations and was rupee positive. But it may not sustain in the coming quarter,' said Anil Kumar Bhansali, vice president at Mecklai Financial.
'Gains in the rupee will be slow and painstaking which will have to be bought into by importers to lessen their pain.'
Dealers also cited a rebound in equities on the back of some recovery in global risk-sentiment, with flows from a large software also cited.
The partially convertible rupee closed at 60.19/20 versus its Wednesday close of 60.7150/7250.
The central bank on Wednesday asked banks to ensure that foreign investors limit themselves to placing hedging-related trades on onshore forward markets on behalf of clients.
The move is in addition to the forex interventions being carried out by the central bank.
However, analysts increasingly feel the RBI needs to use more potent administrative steps like placing curbs on intraday trading positions to have a sharper rein on the rupee.
In the offshore non-deliverable forwards, the one-month contract was at 60.66, while the three-month was at 61.36.
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 around 60.57 with a total traded volume of $5.4 billion.
(Editing by Anupama Dwivedi) Keywords: INDIA MARKETS RUPEE/
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