Rupee rallies most in nearly 2 years on heavy central bank intervention
Bank of India, which traders said could deter heavy speculative positioning against the currency in the near term.
The rupee closed 0.7% higher at 86.8275 against the U.S. dollar, logging its biggest one-day gain since March 2023.
The RBI likely sold between $4 billion and $7 billion to shore up the currency on Monday to help it hold above the 88 handle and the intervention continued on Tuesday, traders said. The currency hit its all-time low of 87.95 in the previous session.
The intervention «overpowered the market and led to cutting of long positions (on USD/INR),» a trader at a mid-sized foreign bank said, noting that trading volumes on the day were «quite huge.»
Concerns about a potential trade war, persistent foreign selling from domestic stocks and policy easing by the RBI have weighed on the rupee this year and prompted speculators to wager against the currency.
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