 "Rupee, Rs, Indian Currency")
RBI likely sold dollars to limit further depreciation in the currency. | Photo: Reuters
The Indian rupee slipped to its weakest closing level on Monday, pressured by a decline in its Asian peers while likely intervention by the Reserve Bank of India ensured the currency did not weaken more.
Â
The rupee closed at 83.9725 against the US dollar, after closing at 83.9550 in the previous session. The currency hovered in a narrow range between 83.95 and 83.97 during the session.
Â
The RBI likely sold dollars to limit further depreciation in the currency, traders said.
Â
Most Asian currencies fell 0.1 per cent to 0.8 per cent while the dollar index edged lower to 103.1.
Â
Traders expect the rupee to be rangebound ahead of the release of closely-watched US consumer inflation data on Wednesday, which is expected to shape expectations of when the Federal Reserve may begin to ease policy rates.
Â
Interest rate futures are currently pricing in about 100 basis points (bps) worth of rate cuts over 2024, starting in September.
Â
“Given a still resilient US economy… and ongoing uncertainty over the upcoming US elections in November, there could still be further repricing of rate-cut expectations,” MUFG Bank said in a note.
Â
Dollar-rupee forward premiums slipped, with the 1-year implied yield down 2 basis points at 2.02 per cent.
Â
While far forward premiums should move higher over the medium term, it would be better to wait for a dip towards 1.95 per cent to initiate a fresh paid position, a foreign exchange trader at a private bank said.
Â
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Aug 12 2024 | 4:38 PM IST
