By Jaspreet Kalra
MUMBAI, Feb 20 (Reuters) – The Indian rupee weakened on Friday, weighed down by a broadly firmer dollar and tepid global risk appetite while likely intervention by the Reserve Bank of India averted a fall past the key 91 per dollar mark.
The rupee was at 90.93 as of 11:20 a.m. IST, down 0.3% compared to its close on Wednesday. Indian debt and FX markets were shut on Thursday for a local holiday.
Brent crude futures topped $72 a barrel – a 6-1/2 month high – and the dollar was firm in Asia trading after U.S. President Donald Trump set a deadline of 10 to 15 days for Iran to cut a deal over its pursuit of nuclear weapons, or face “really bad things”.
Stocks in Asia dipped but Indian equity benchmarks gained about 0.5% following a sharp drop in the previous trading session.
Traders and analysts reckon that the rupee’s bias is tilted towards modest depreciation with interventions by the Reserve Bank of India keeping a lid on the pace of declines.
Maturing contracts in the non-deliverable forwards market have also been a sore spot for the rupee over recent sessions, with traders anticipating a stream of such maturities lined up as the month draws to an end.
“A decisive break above 91.05 (for USD/INR) would signal further upside momentum, opening the path toward 91.50 and higher levels in the near term,” said Amit Pabari, managing director at FX advisory firm CR Forex.
Global markets, meanwhile, will focus on the release of the U.S. core PCE price index and advance fourth quarter GDP figures later in the day, alongside geopolitical developments in the Middle East, which could drive the next moves for currencies.
(Reporting by Jaspreet Kalra; Editing by Janane Venkatraman and Ronojoy Mazumdar)
