Indian rupee edges higher amidst volatile swap rates

The Indian rupee slightly appreciated against the US dollar on Monday, in line with other regional currencies. However, there were unusually high levels in near-tenor dollar-rupee swap rates, which traders attributed to panic bidding.

As of 11 a.m. IST, the rupee traded at 85.4750 against the dollar, a modest improvement from its previous close of 85.5325.

The surge in very near-dated dollar-rupee swap rates was a key market feature, with traders citing year-end adjustments, tightened rupee liquidity, and a lack of intervention from the Reserve Bank of India (RBI) as contributing factors.

Attribution: Reuters

Subediting: Y.Yasser