Rupee little changed as importer dollar demand blunts strength in Asian peers
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The Indian rupee was little changed on Friday, bucking the strength among most Asian peers, as persistent U.S. dollar demand from importers and equity-linked outflows kept up the pressure on the local unit.
The rupee was at 83.2425 as of 10:30 a.m. IST, compared with its close of 83.23 in the previous session. It drifted in a narrow range between 83.22 and 83.2475 in early trade during the spot session.
"At this point, you simply can't pinpoint a trigger that will move it (the rupee) out of this un-tradable range," a foreign exchange salesperson at a bank said.
The U.S. Federal Reserve's upcoming policy decision is also unlikely to budge the rupee out of its current range, the trader added.
The Fed is widely expected to keep rates unchanged at its upcoming meeting.
Asian currencies were mostly higher, aided by an improvement in risk appetite as U.S. treasury yields retreated despite robust U.S. GDP data. The Korean won led gains among the rupee's Asian peers, up by nearly 0.7%.
The dollar index was steady at 106.5 and Brent crude oil futures rose in Asia but continued to hold below $90 per barrel.
"Broadly, we expect the pair (USD/INR) to spend more days within a band of 83.00 to 83.30," said Amit Pabari, managing director at FX advisory firm CR Forex. The Reserve Bank of India (RBI) has made the rupee the most stable currency in the EM space, he said.
The RBI has intervened routinely to cap losses for the rupee as the unit continues to hover near its record low levels. The rupee had hits its lifetime low of 83.29 in October 2022.
Equity-related outflows have also maintained pressure on the rupee, traders said. Overseas investors have sold Indian equities worth $1.67 billion in October so far.
