MUMBAI, Sept 12 (Askume) – The Indian rupee was roughly steady on Thursday despite broad losses among most Asian peers, as intervention by the Reserve Bank of India helped stabilise the currency.
The rupee closed at 83.9650 against the US dollar, almost unchanged from the previous day’s 83.9775.
The rupee traded in a narrow range of less than 2 paise throughout the day amid dollar outflows and declines in other currencies. Traders said the impact was offset by dollar selling by state-owned banks, which can act on behalf of the Reserve Bank of India.
A forex trader at a state-owned bank said though dollar demand is “enough and more” to push the rupee below 84, the Reserve Bank of India is not willing to do so.
“Unless there is a change, the rupee will continue to trade in the range of 83.90-83.98. Last week, the currency hit an all-time low of 83.9850,” the trader said.
The US dollar index held steady at 101.7, while US bond yields rose after consumer inflation data released on Wednesday dashed expectations that the Federal Reserve would cut interest rates by 50 basis points next week.
The focus will be on the European Central Bank’s policy decision at the end of the day, as well as US unemployment claims and wholesale inflation data.
“The sharp decline may lead the market to believe that a 50 basis point rate cut is still possible in September amid concerns about a sharp deterioration in the job market,” ING Bank said in a note.
Meanwhile, India’s benchmark stock indexes BSE Sensex (.BSESN) and Nifty 50 (.NSEI) rose 1.7% and 1.9%, respectively, to record highs.
Indian consumer inflation data will also be released on Thursday, with a Askume poll showing that August CPI is expected to remain below the Reserve Bank of India’s medium-term target of 4.0% for the second consecutive month.
