Rupee weakens to 84.28 against US dollar on Trump's return to power
In relative terms, however, the rupee’s 0.2% decline through the day was modest in comparison with competing Asian monetary units where the US holds a disproportionate share in their respective merchandise exports. Thai Baht depreciated the most at 1.8%, while the Chinese Yuan slumped 1.2%.
Still, Wednesday’s was the worst single day fall for the local currency in over four months as the dollar index was up 1.5% to 104.95, LSEG data showed. The rupee fared better than other Asian currencies which depreciated as much at 1.8%. A stronger dollar index typically exerts downward pressure on emerging market currencies such as the rupee.
Intervention from the Reserve Bank of India (RBI) helped rein in losses for the rupee, as the central bank was seen protecting multiple levels in the currency exchange rate throughout the day, traders said.
“The RBI today did not protect one level, and allowed the rupee to depreciate during the day. Usually, they protect one level for at least a day,” said Anil Bhansali, Head of Treasury, Finrex Treasury Advisors. “Today, they (RBI) first brought the rupee down from 84.26/$1 in NDF (non deliverable forward) market, and the currency opened around 84.12/$1, then they were protecting at 84.20/$1 and then at 84.25/$1, and by the end of the day, they let the 84.25/$1 go too,” he said.
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