Indian rupee ends flat amidst dollar strength

The Indian rupee ended Monday’s trading session almost unchanged, supported by the Reserve Bank of India‘s (RBI) intervention. Despite challenges from portfolio outflows and a weakening trend in most Asian currencies, the rupee held steady.

The currency closed at 84.3850 against the dollar, a marginal change from the previous session’s close of 84.3950. Throughout the day, the rupee traded within a narrow 2-paisa range, while its regional peers experienced declines of 0.1 per cent to 0.3 per cent.

State-run banks, acting on behalf of the RBI, intervened in the market by selling dollars to support the rupee. The central bank has increasingly relied on non-deliverable forward (NDF) market interventions to limit the rupee’s depreciation while minimising the depletion of foreign exchange reserves.

India’s foreign exchange reserves have declined for six consecutive weeks, reaching $675.65 billion as of November 8th, down from a record high of $704 billion in late September.

The central bank’s interventions have been crucial in safeguarding the rupee against sustained capital outflows from Indian equities, the strengthening dollar, and the rise in US Treasury yields.

Attribution: Reuters

Subediting: M. S. Salama