RBI steps in to keep rupee from slipping to record low, traders say
State-run banks were spotted offering dollars right before the local spot market opened, most likely on behalf of the RBI, traders say
The Reserve Bank of India (RBI) likely stepped in on Friday to prevent the Indian rupee from plummeting to an all-time low, according to three traders speaking to Reuters. The rupee had been under pressure due to a combination of persistent portfolio outflows, rising oil prices stemming from the Iran war, and increased US Treasury yields.
As of early trading, the rupee was trading at 96.7575 per dollar, showing little change for the day but narrowly avoiding the record low of 96.96 that it had hit in May. State-run banks were reportedly offering dollars in the hours leading up to the opening of the local spot market, most likely acting on behalf of the RBI, the traders suggested.
The central bank had been actively engaged in the foreign exchange market over the past few sessions. However, the ongoing pressures from high oil prices, significant portfolio outflows, and higher US Treasury yields have continued to weigh on the rupee's value.
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