India c. bank intervention supporting rupee likely

The Reserve Bank of India (RBI) is believed to have intervened in the foreign exchange market to support the rupee, which hit a record low on Tuesday. The Indian currency weakened to 84.40 per dollar, surpassing its previous low of 84.3925.

State-run banks were observed offering dollars near the 84.40 level, a move that is widely interpreted as a sign of central bank intervention.

The dollar index strengthened to four-month high, and Asian currencies, including the offshore Chinese yuan, also weakened.

Market participants anticipate the RBI to maintain its defensive stance around the 84.40 level in the short term. However, the general trend for the USD/INR pair is expected to be upward, with a potential move towards 84.50.

Attribution: Reuters

Subediting: M. S. Salama