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Asian Currency

Rupee hits record low amid dollar demand, RBI steps in


The Indian rupee hit an intraday record low of 84.09 per US dollar, due to dollar demand from local companies and as traders turn risk averse ahead of presidential elections in the world’s largest economy. Likely intervention from the Reserve Bank of India helped contain a sharp depreciation in the local currency, traders said.

On a closing basis, the rupee was largely unchanged and closed at 84.0775/$1, versus its previous close of 84.075 per US dollar, according to LSEG data.

“Oil companies and nationalized banks were constant buyers of dollars to finish their respective month end demand. The RBI continued to supply dollars at 84.08/$1 to 84.09/$1 levels keeping rupee within the small range of 3 paise”, said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

This is the ninth consecutive session where the rupee has traded in a narrow range, likely due to intervention by the central bank.

The RBI’s stated position is that it does not target particular levels for the currency and intervenes in the foreign exchange market to prevent sharp volatility in the exchange rate.

Growfast


Investors will now be looking at the non farm payroll data expected on Friday to gauge the quantum of rate cut by the US Federal Reserve, along with the outcome of the US presidential elections due on November 5.



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