INSUBCONTINENT EXCLUSIVE:
After coming within touching distance of weakening past the 83 per dollar mark for the first time in four months, the rupee recouped
losses on Monday as the Reserve Bank of India (RBI) likely stepped in to prevent excess volatility in the currency market through dollar
sales.
The central bank is said to have intervened on a sustained basis this month to shield the rupee from turbulence in the face of sharp
gains in the US dollar globally, traders said
Consequently, the Indian currency has fared better than 11 other emerging market (EM) currencies so far this month, Bloomberg data
showed.
On Monday, the rupee settled at 82.85 per US dollar as against 82.75 per dollar at previous close
So far in 2023, the rupee has depreciated 0.13 per cent against the US dollar.
On Monday, the rupee weakened to a low of 82.95 per dollar
intraday as sentiment for EM currencies weakened after certain US data sets strengthened the case for the Federal Reserve to continue hiking
The last time the rupee had weakened past the 83-mark intraday was on October 20, 2022
On that day, the Indian currency had touched its all-time intraday low of 83.29 per US dollar.RBI intervention
The US dollar index, which
measures the greenback against six major currencies, was at 105.16 at 3:30 pm IST versus 104.72 at the same time on Friday.
However, the
So far in February, the rupee has weakened 1.1 per cent against the US dollar, much lower than 11 other EM currencies, Bloomberg data showed
The South Korean won and the Thai baht have weakened more than 6 per cent each.
On Monday alone, the central bank was said to have sold
close to $1 billion in the currency market
weakened on Monday, too, with the yield on the 10-year benchmark bond rising past the 7.45 per cent level for the first time since November
A combination of factors, including higher-than-expected domestic inflation data for January and hardening US bond yields have soured the
flexibility at a time of global uncertainty
interest rate derivatives at Kotak Securities, said.
He said the RBI was intervening in both offshore and onshore
by $15.49 billion since January 27, latest data showed
overseas treasury, sees the rupee in a range of 82.50-83.00 to the dollar over the near term
He continues to see pressure on the Indian unit, given the latest signals on US interest rates
globe is pointing to a higher reset on terminal interest rate expectations
For now, the 7.45 per cent level may hold because there is demand from long-term investors, but going ahead the bond market faces a lot of
