Rupee Recovers 55 Paise on RBI Intervention
“The rupee is expected to trade in the range of 91.25 to 91.75 tomorrow, which is the last trading day of the week,” said a trader.
Mumbai:The Indian rupee on Thursday reclaimed most of the losses it made a day earlier, appreciating by 55 paise to close at 91.60, supported by suspected central bank intervention and a recovery in the equity market.
According to forex traders, the RBI intervened heavily before 9 a.m. to ensure that the rupee opened at the 91.56 level in the spot market and continued to intervene throughout the day to prevent any sharp deceleration. Market participants remained defensive, with importer demand for dollars persisting through the session.
At the interbank foreign exchange market, the rupee opened at 91.56 to a dollar and traded within an intraday range of ₹91.40–₹91.6425 per dollar before ending the session at 91.60. On Wednesday, the rupee had weakened past 92 per dollar for the first time, driven by a sharp rise in crude oil prices and a broader shortage of dollar liquidity in global markets amid the escalating conflict involving Iran, the US and Israel.
Experts said that the key variable to monitor now is the status of the Strait of Hormuz, a critical artery for global oil shipments. The longer disruptions persist, the higher oil prices are likely to move, which in turn could push USD-INR further upward.
An extended crisis would weaken India’s macroeconomic outlook through elevated imported inflation, widen the current account deficit, increase the burden of external debt servicing, and amplify the impact of higher energy costs and lower GDP growth. Brent crude has risen more than 13 per cent since the war broke out over the weekend.
Traders said there were sufficient dollar buyers who kept the rupee near the 91.63 level, but the RBI remained firm and did not allow any upward move. The dollar index was above 99 and oil prices also crossed $84, yet the rupee remained largely unmoved.
Premiums fell to 2.46 per cent in the one-month segment and 2.70 per cent in the one-year segment on heavy receiving by the RBI after it sold dollars during the day. The RBI also intervened in the bond market, bringing the 10-year yield below 6.65 per cent.
“The rupee is expected to trade in the range of 91.25 to 91.75 tomorrow, which is the last trading day of the week,” said a trader.
