MUMBAI, May 28 (Reuters) - The Indian rupee ended nearly flat on Wednesday, as the impact of month-end dollar demand from importers was offset by an uptick in regional peers.
The rupee closed at 85.36 against the U.S. dollar from 85.33 in the previous session. The unit weakened to 85.70 earlier in the session, but recouped most losses as the dollar index eased.
Traders built up intra-day shorts on the rupee in anticipation of outflows related to an equity block deal but the price action indicated that the flows did not materialise as expected, a trader at a Mumbai-based bank said.
British American Tobacco sold a $1.5 billion stake in Indian consumer goods company ITC on Tuesday. India's benchmark equity indexes closed slightly in the red.
The dollar index was last at 99.5, little changed on the day while the Korean won and Thai baht led gains in Asian currencies with a 0.4% rise.
The minutes of the Federal Reserve's May policy meeting are due later in the day and will be in focus for cues on policymakers' thinking on the future trajectory of interest rates amid uncertainty spurred by U.S. trade policies.
"The details will be important in providing a sense of the level of conviction on the Fed’s willingness to remain on the side-lines in order to assess the uncertainty created by trade tariffs," MUFG Bank said in a note.
Interest rate futures are currently pricing in nearly two U.S. rate cuts over 2025.
India's overnight index swaps have priced in at least two rate cuts by the Reserve Bank of India as well, supporting a bullish outlook for the country's sovereign bonds.
Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala
Source: Reuters