Indian rupee remains flat on bets of RBI intervention

The rupee 'will stay in a narrow range today,' a foreign exchange trader at a state-run bank said

By Reuters

Published: Thu 7 Sep 2023, 10:23 AM

The Indian rupee was largely unchanged on Thursday, shrugging off the decline on Asian peers and worries over oil prices on bets that the central bank will continue to defend the currency.

The rupee was at 22.655 to the UAE dirham compared with 22.651 in the previous session.

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The rupee "will stay in a narrow range today," a foreign exchange trader at a state-run bank said.

It is unlikely to drop to a record low during Thursday's session as the Reserve Bank of India is likely to supply dollars at 83.20-25 levels (against the US dollar), the trader added. The rupee's record low is 83.29 against the US dollar.

Other Asian currencies were lower after U.S. Treasury yields rose on Wednesday on robust services data. The U.S. Institute for Supply Management (ISM) said its non-manufacturing purchasing managers' index (PMI) rose to 54.5 last month, the highest reading since February and up from 52.7 in July.

The dollar index was at 104.90, within touching distance of the highest level seen in nearly six months. The Chinese yuan declined to 7.3338 to the dollar.

Brent crude is hovering at the highest level since November 2022.

During the session, the rupee is likely to trade sideways with a negative bias, according to Gaurang Somaiya, a foreign exchange researcher at Motilal Oswal Financial Services.

Analysts expect the rupee to hold near its historic low over the next six months despite the RBI's help to defend the currency, according to a Reuters poll of 45 analysts.

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