INDIA RUPEE-Rupee ends little changed as RBI intervention fear limits fall
rupee ended flat on Thursday as broad strength in the greenback was offset by exporter dollar sales and fears of potential central bank intervention to limit the downside, traders said.
The rupee ended at 83.09 against the U.S. dollar, little changed from 83.0725 in the previous session.
Asian currencies were mostly weaker, with the Korean won leading losses as dollar strength weighed on emerging market currencies.
The dollar index rose to a six-month high in Asia and was last quoted at 105.54.
U.S. treasury yields, both near and far, also climbed to decadal highs after the U.S.
Federal Reserve delivered a hawkish pause on Wednesday.
The median dot plot in the Fed's summary of economic projections showed 50 bps of rate cuts in 2024, lower than the 100 bps that officials had projected in June.
The Fed's tone, a fall in Asian currencies and a dip in Indian equities are all fundamentals that should have weakened the rupee further but that has not happened, said Ritesh Bhansali, director at Mecklai Financial. «The only reason is RBI.»
Benchmark Indian equity indices, the BSE Sensex and Nifty 50, ended lower by about 0.8%.
While the rupee hovered close to a record low on Wednesday, likely intervention by the RBI kept the rupee from falling to those levels again.
The central bank has intervened on multiple occasions to defend the local unit.
The rupee is likely to hold between 83 and 83.30 levels in the near term with a slight downside bias, a foreign exchange trader at a state-run bank said.
Crude oil prices and its relative position against the Chinese yuan are key factors to watch for the rupee, the trader added.
Brent crude oil futures fell by 0.9% in Asia to $92.64, while the offshore Chinese yuan weakened 0.25% to 7.3052
