Rupee Gains 10 Paise To 96.65, Likely RBI Intervention Cushions Currency

Mumbai witnessed the Indian rupee gaining 10 paise to trade at 96.65 against the US dollar, potentially bolstered by interventions from the Reserve Bank of India, traders noted. The currency opened at 96.71 on the interbank market before bouncing back to 96.65. It had settled at 96.75 the previous day. However, the rupee remained constrained within a tight range as factors like strong demand for the dollar, expensive crude oil, and consistent selling by foreign investors continued to drag sentiment.

Despite the gains, concerns about the currency's valuation remained as RBI Governor Sanjay Malhotra assured stability, highlighting the near-record low of the rupee against the US dollar. Forex traders cited ongoing macroeconomic hurdles, including a strong dollar and dwindling foreign exchange reserves, with reserves dropping approximately $50 billion over three weeks from September’s peak of $786 billion.

The dollar index ticked up 0.01% to 102.25. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors, explained that corporate importer demand and safe-haven capital movements had outpaced RBI’s hawkish policy stance during the session. Interventions via state-run banks were credited with curbing additional rupee losses.

Traders remained vigilant for further measures by the RBI to curb speculative activity in the dollar-rupee pair. The rupee slipped to 96.39 against the dollar, weighed down by rising oil prices and Foreign Institutional Investor (FII) selling. Brent crude futures surged 2.17% to $102.37 per barrel, reflecting concerns over potential supply disruptions through the Strait of Hormuz, including tanker attacks in the Gulf and the critical shipping lanes.