MUMBAI, Sept 12 (Askume) – The Indian rupee held above record lows on Thursday, supported by possible intervention by the Reserve Bank of India (RBI) amid weakness in most Asian currencies.
At 10:20 am, the rupee was trading at 83.9725 against the US dollar, almost unchanged from the previous day’s close of 83.9775. Last week, the rupee fell to an all-time low of 83.9850.
US consumer prices rose slightly in August, but underlying inflation steadied, dashing expectations that the Federal Reserve would cut interest rates by a massive 50 basis points (bps) next week.
This puts pressure on Asian currencies. But traders said the rupee remained strong as state-run banks led by the Reserve Bank of India sold dollars.
“The rupee has remained stable within a certain range due to the active management of the Reserve Bank of India,” said Amit Pabari, managing director at forex advisory firm CR Forex.
The Reserve Bank of India has intervened regularly over the past month to keep the rupee above the key psychological support level of 84.
A trader at a foreign bank said there was a “slight chance” of the rupee falling below 84 in the next few days, but given the central bank’s control over the currency, a sharp drop was unlikely.
At the same time, the dollar’s forward premium against the rupee fell, with the 1-year implied yield falling 2 basis points to 2.23% from a 16-month high hit on the previous trading day.
The focus will be on US unemployment benefits data and wholesale inflation data released later in the day to estimate the range of the Federal Reserve’s possible interest rate cuts in 2024.
