Indian rupee drops against UAE dirham as dollar demand increases

The Indian rupee dropped on Thursday due to increased dollar demand from importers related to month-end payments and likely unwinding of long positions after it failed to hold above a key resistance level at 83.50.

The South Asian currency was at 83.6850 against the US dollar (22.80 against UAE dirham) as of 10.45am IST (9.15am, UAE time), down 0.1 per cent from its closing rate of 83.5925 (22.78).

Asian currencies were mixed while the dollar index was down 0.1 per cent at 100.8.

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Importers, including oil companies, were spotted buying dollars, traders said.

A large foreign bank has also been consistently bidding for dollars, which is likely related to an unwinding of some long bets on the Indian rupee, a trader at a foreign bank said.

While "inflows have been quite strong, especially in the debt market" over recent sessions, strong dollar demand between 83.45 and 83.50 has kept a lid on the currency's gains, a trader at a private bank said.

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