MUMBAI: The Indian rupee fell on Friday following large outflows from a private equity firm's stake sale, climbing down after the government's push for fiscal and economic reforms had sent the local currency to a six-month high earlier in the session.
The falls on Friday end a five-day winning streak, with analysts warning of some consolidation, especially with US monthly jobs data due later in the day and in the run-up to the Reserve Bank of India's policy review at the end of the month.
The rupee has gained for five consecutive weeks, ever since India's reform drive began last month. The initiatives continued on Thursday after the government announced proposals to attract foreign investment into the pension and insurance sectors.
"Most of the news about reforms are now discounted by the market. Now actual flows have to take place for further direction," said Hari Chandramgathan KK, a dealer at Federal Bank.
"Expect some consolidation towards 52.40/53.20 levels before next major move."
The partially convertible rupee closed at 51.85/86, as per the State Bank of India closing rate from Thursday's close of 51.74/75.
It rose to 51.32 earlier in the session, its highest since April 13.
The rupee gained 1.9 percent for the week, marking its longest winning stretch since a five-week run that ended Feb 5.
The rupee's fall on Friday was largely driven by Carlyle Group's $841 million stake sale in the country's top mortgage lender, Housing Development Finance Corp Ltd .
Dealers also said oil bids and a sudden plunge in stocks caused by dozens of erroneous orders by a financial firm had kept sentiment more cautious.
USD/INR 1-month non-deliverable forwards were last trading at 52.10.
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 52.08 with a total traded volume of around $7.5 billion.
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