The Indian currency opened at 95.73 per US dollar, compared with Monday’s (August 224) close of 95.75. However, on Monday, the rupee had opened at 95.64 against the US dollar.
In addition, the 10-year bond yield dipped to 6.94%.
As per a Reuters report, traders are anticipating that the RBI will intervene to mitigate pressure on the currency. Additionally, a slight increase in portfolio inflows is expected to provide some support.
The rupee continues to face challenges from ongoing hedging demand by local corporations and the sporadic maturity of derivative contracts, compounded by persistently high oil prices.
Frequent interventions by the central bank have contributed to the rupee being one of the most stable currencies in Asia over the past two weeks, keeping it within a narrow range of under 30 paisa between 95.45 and 95.75.
The report also pointed at the increased foreign portfolio inflows have provided a stabilising effect for the rupee. Foreign investors have net purchased over $2.5 billion in Indian equities so far in August, an increase from $2.1 billion in the previous month, reversing four months of significant outflows totalling nearly $28 billion.
Meanwhile, the aforementioned Brent crude picked up a little, rising above the $93 mark again as the US-Iran conflict seems to find no way to a solution.
Meanwhile, another major factor influencing the currency, gold, rose again. The precious metal is now trading close to a three-month peak as traders assess the US Treasury’s forthcoming actions in the bond market. This follows an unexpected intervention that has reignited concerns regarding fiscal policy.
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(Edited by : Juviraj Anchil)
