Finance
The Indian rupee was little changed on Thursday, despite Asian peers rising, as importers and domestic oil businesses offset a weakening of the US dollar. The rupee was trading at 83.2350 against the US dollar at 11:30 a.m. IST, having closed at 83.24 the previous session.
The dollar index slipped to 106.62, a 0.12% drop. Asian currencies advanced, with the Korean won leading the way. Treasury yields in the United States fell after reaching multi-year highs earlier in the week. The 10-year Treasury yield was recently reported at 4.71%, down from 4.88% on Wednesday, the highest level since August 2007.
Persistent selling from foreign investors could also mount pressure on the local unit, a foreign exchange trader at a state-run bank said. Foreign investors snapped a six-month buying streak in September, selling over $1.77 billion worth of equities. The rupee is likely to see “one more day of sideways trading,” said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. In some ways, the rupee is caught in a “tug of war between foreign investors and the RBI,” Parmar added.
The RBI has repeatedly intervened to strengthen the rupee and keep it from falling to historic lows. In October 2022, the currency reached a lifetime low of 83.29. According to a Reuters poll, the rupee is anticipated to strengthen just little and remain around 83.00/US dollar for the next one to three months, as RBI action is expected to keep the unit in a restricted range. The focus now shifts to the Reserve Bank of India’s monetary policy announcement, which is scheduled for Friday. Rates are widely expected to remain steady by the central bank.
Source:FE
