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Below is quote on Evening Currency Update 20 December 2021 by Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives, Kotak Securities

USDINR surprised many in the market by closing 18 paise lower at 75.90 on spot, after making a low of 75.83. Rupee appreciated on a day when global equity markets were under pressure and there were heavy selling of local stocks as well. Even the US Dollar index was trading higher. We suspect it may have been an aggressive intervention from the RBI. RBI may be getting concerned with the depreciation of the Rupee towards its all-time lows near 75.90 on spot. A weaker Rupee can add to the inflation pressures. At the same time, RBI is holding net long positions in USDINR forwards of more than $40 billion and they look to lock in profits and boost their surplus payable to the GOI, march end. All in all, with RBI entering the market aggressively, we may see more range bound action in the coming days. We expect a range of 75.60 and 76.20 on spot.

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