The rupee had been expected to open weaker as the dollar strengthened ahead of the Federal Reserve’s policy decision. However, traders said the RBI sold dollars through state-run banks, helping prevent a sharper fall.
The central bank has maintained a regular presence in the currency market in recent sessions. At the same time, it has used dollar-rupee sell-buy swaps to manage excess rupee liquidity in the banking system. Traders said the RBI does not appear to be protecting one fixed exchange rate.
Instead, the central bank has focused on slowing sharp currency moves. Sajal Gupta, head of forex and commodities at Nuvama, said, “The RBI won’t let the rupee appreciate, and they have enough ammunition to defend weakness too.” He expects the currency to remain broadly within the 94.50-96.50 range in the near term.
