Rupee gains 15 paise to 96.81 against dollar, likely helped by RBI intervention
Indian rupee strengthened by 15 paise, closing at 96.81 against the US dollar. Regulatory actions seemed to influence this positive movement after a low of 95.94. The Reserve Bank of India intervened, aiding the local currency amid concerns over high crude prices. Exporters sold dollars in response to the rising interest rate differential. The benchmark 10-year bond yield also fluctuated,…
Indian rupee rose 15 paise to 96.81 per dollar at the end of trading on Thursday, potentially aided by Reserve Bank of India (RBI) market intervention. The local currency rebounded from a low of 95.94 and the previous close of 95.96 during the day. Large public sector banks were reported to have sold dollars at the RBI's request, contributing to the rupee's rebound from the near 96 level.
The RBI was seen in the market prior to the day's trading, pushing the currency higher at 95.90 per dollar upon opening. The RBI utilized dollar-rupee sell-buy swaps to absorb excess rupee liquidity from the inter-bank system, according to two sources. Exporters also sold dollars due to a widening interest rate gap between the US and India.
RBI deputy governor Poonam Gupta's remarks that the rupee was overcorrected and needed appreciation were seen as stabilising factors. While the rupee is facing external financing pressures and a higher global cost of capital, a significant drop in domestic interest rates could negatively impact currency stability, according to a treasury head of a private bank.
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.
