Indian c. bank likely sells dollars to stem rupee’s slide

The Indian central bank probably sold dollars to curb the rupee’s decline after it reached an all-time low on Tuesday due to increased US bond yields and local oil companies’ demand for dollars, traders said.

The rupee was trading at 85.16 against the US dollar at 9:20 am IST, dropping to a low of 85.1625 earlier in the trading session.

Traders noted that state-run banks were seen selling dollars, possibly acting on behalf of the Reserve Bank of India (RBI).

State-run banks were offering dollars around 85.16-85.17 levels, but the trader at a private bank noted that the offers were not significant.

The trader also said that the rupee might decline towards 85.20 during the day, with the RBI expected to monitor any sharp drops.

Attribution: Reuters

Subediting: M. S. Salama