Rupee gains 15 paise to 95.81 against dollar, likely helped by RBI intervention
Market participants said large public sector banks were seen selling dollars at the behest of the Reserve Bank of India (RBI) in a market with thin volume, helping the local currency recover from the near 96 level despite global crude price hovering around $105 a barrel and raising the risk of imported inflation.
The Indian rupee strengthened by 15 paise to 95.81 against the US dollar on Friday, rebounding from a low of 95.94 and the prior close of 95.96, while bond yields rose to a four-month high. Trading in a thin volume market, major public sector banks were reportedly selling dollars at the Reserve Bank of India's (RBI) behest, aiding the local currency's recovery from near 96.
Despite a crude price near $105, the rupee risked imported inflation. The RBI's pre-market intervention saw the rupee opening at 95.90, traders noted. The central bank utilized dollar-rupee sell-buy swaps to absorb liquidity from inter-bank systems, and exporters also offloaded dollars, pushing the one-year forward premium to 3.5%, a level unseen since mid-May.
RBI deputy governor Poonam Gupta's remarks about the rupee being overcorrected signaled a potential stabilization, while the bank's treasury head urged moderation in depreciation. Weakening for days due to concerns about external financing and dollar demand, the rupee's strength was seen as a positive amid global yield tightening, with US and German 10-year yields rising to 5.20% and 3.5798%, respectively.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Rupee gains 15 paise to 96.81 against dollar, likely helped by RBI intervention economictimes.indiatimes.com
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