Indian rupee holds steady amidst Asian currency weakness

The Indian rupee slightly declined on Tuesday, in line with other Asian currencies. The Reserve Bank of India’s repeated interventions at current levels have helped limit the rupee’s losses.

At 11:02 am IST, the rupee was trading at 83.9475 against the US dollar, compared to 83.9175 in the previous session. Asian peers witnessed a decline of 0.1 per cent to 0.6 per cent, while the dollar strengthened against a basket of major currencies.

The RBI has actively intervened in the foreign exchange market multiple times over the past month, preventing the rupee from falling below the 84 level.

A proprietary trader at a bank noted that while there is upward pressure on the dollar-rupee exchange rate, it is not advisable to chase the trend.

The trader expressed uncertainty about whether the RBI would be offering support in the market on Tuesday, but emphasised that the central bank’s past behaviour has been sufficient to deter speculators and provide support to importers.

Looking ahead, the Federal Reserve is scheduled to meet on September 17-18, where a rate cut is widely expected. While a 25-basis point cut is fully priced in, there is a possibility of a larger rate cut.

Attribution: Reuters

Subediting: M. S. Salama