Rupee posts best day in 2 months on equity inflows, banks' dlr sales
rupee posted its biggest one-day gain in more than two months on Wednesday, traders said, likely due to dollar inflows into the equity markets while state-run banks also sold the greenback.
The rupee closed up 0.3% at 82.6850 to the dollar, compared with its close of 82.9350 in the previous session.
State-run banks selling the greenback, especially in the last hour or so, pulled the pair down, a trader with a state-run bank said.
In a move to reduce pressure on the local unit, India's central bank has also asked some banks to stop taking fresh arbitrage positions in the non-deliverable forwards (NDF) market, sources told Reuters.
«I have been hearing about IPO and QIP flows but difficult to know for sure in this kind of price action,» a senior forex trader at a private bank said.
The rupee managed to hold above 83 despite the dollar's advance against most Asian peers.
A move higher on near-maturity U.S. Treasury yields hurt demand for Asian currencies, while the dollar index hovered near 103.90.
A resilient U.S.
economy has prompted investors to assess how long interest rates are likely to remain high. The 10-year U.S.
yield reached a multi-year high earlier this week.
The Federal Reserve must be open to the possibility that the economy will begin to reaccelerate rather than slow, with potential implications for the U.S. central bank's inflation fight, Richmond Fed President Thomas Barkin said on Tuesday.
Fed Chair Jerome Powell's speech at the Jackson Hole Symposium on Friday will give investors more clarity on the path for rates.
Traders will also be keeping an eye out for the release of the Reserve Bank of India's monetary policy committee meeting minutes due on Thursday.
