Indian rupee remains stable amid RBI interventions

The Indian rupee remained stable on Monday despite outflows, as dollar offers from state-run banks offset the pressure. Traders anticipate the Reserve Bank of India (RBI) to protect the currency from significant drops.

The rupee closed at 84.07 against the US dollar on Monday, compared to its previous close of 84.0650. Earlier this month, the rupee reached its all-time low of 84.0775, but the RBI’s intervention helped limit losses.

The rupee has been under pressure in October due to increased outflows from local stocks and high oil prices. Although oil prices have decreased, foreign outflows from local stocks are set to reach a record high of $9.2 billion this month.

Despite the significant outflows, the rupee has outperformed most of its Asian peers this month. This is largely attributed to the RBI’s regular interventions to prevent sharp declines.

On Monday, state-run banks were observed offering dollars near the 84.07 level, likely on behalf of the RBI. While the rupee is expected to remain under pressure, traders believe the RBI will not allow it to weaken below 84.10.

Asian currencies and the dollar index remained within a narrow range during Asian trading hours. US bond yields were slightly higher.

Attribution: Reuters

Subediting: M. S. Salama