Rupee holds above 84 per dollar as cenbank retains grip
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
The Indian rupee ended nearly unchanged on Tuesday as intervention by the central bank helped avert a fall to the key psychological support level of 84 to the dollar.
The rupee closed at 83.97, nearly unchanged from its close at its all-time low of 83.9725 in the previous session.
The currency hovered near its record low through the session. The Reserve Bank of India likely sold dollars, via state-run banks, near 83.97 levels to support the local currency, traders said.
With the RBI not keen to allow the rupee to weaken further, the 83.90-83.97 range should hold in the near-term, at least till U.S. consumer inflation data is out, a trader at a foreign bank said.
The U.S. will report retail inflation data on Wednesday. Indian financial markets are closed on Thursday.
The dollar index was up 0.1% at 103.2 while most Asian currencies rose, with the Indonesian rupiah up 0.7% and leading gains.
Concerns about a slowdown in the U.S. and unwinding of carry trades had spurred a bout of volatility in global markets last week, which has now subsided.
Odds of the Federal Reserve cutting rates by 25 basis points or 50 basis points in September were evenly split.
"We continue to look for a soft landing in the U.S. and weak recoveries in Europe and Asia. For FX markets, this should mean a shift to some orderly dollar weakness from the disorderly position adjustment of recent weeks," ING Bank said in a note.
Dollar-rupee forward premiums ticked up, with the 1-year implied yield up 2 basis points at 2.04%.
