Market participants said that the Reserve Bank of India intervened in the foreign exchange market via dollar sales, which prevented the rupee from further depreciation
Anjali Kumari Mumbai
The Indian rupee settled at a new closing low of 83.66 against the US dollar, tracking the strengthening of the greenback and the overnight rise in crude oil prices, said dealers.
The rupee had hit the intraday record low of 83.67 per dollar on June 20. The previous record closing low was also witnessed on the same day at 83.65 per dollar.
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The rupee had settled at 83.58 per dollar on Tuesday. Money markets were closed on Wednesday on account of Muharram.
“The rupee traded weak by 8 paise to Rs 83.66 per dollar, driven by volatility triggers and global market uncertainties. Despite the overall positive trend in Indian markets, the rupee faced weakness due to US-China trade jitters, which may rise again with the potential re-election of Trump. However, RBI norms and interventions have been keeping the rupee stable. Eyes are set on the Union budget, with expenditure and income numbers expected to introduce further volatility to the rupee,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
The dollar index was trading higher by 0.09 per cent at 103.83. It measures the strength of the greenback against a basket of six currencies.
“Importers were buying dollars because of the rise in crude oil prices,” said a dealer at a large state-owned bank. “The next stop should be at Rs 83.72 per dollar,” he added.
Market participants said that the Reserve Bank of India intervened in the foreign exchange market via dollar sales, which prevented the rupee from further depreciation.
“In dollar-rupee there is a demand almost daily either from oil companies or from government debt payment or defence or FPIs. Today it was a defence deal which took it higher. RBI intervened at 83.60 per dollar and later at Rs 83.66 per dollar, almost amounting to 500 million but it was not strong enough to bring the pair down,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
The rupee has depreciated by 0.3 per cent in the current financial year, while it witnessed 0.5 per cent depreciation during the current calendar year. In the current month, the local unit has depreciated by 0.3 per cent so far.
