Indian rupee flat as corporate dollar purchases counter weaker dollar

The rupee reached 22.44 last Thursday but has struggled since due to the demand from importers

By Reuters

Published: Tue 29 Aug 2023, 10:21 AM

The Indian rupee was little changed on Tuesday after surrendering its opening gains due to the dollar demand from corporates, traders said.

The rupee was at 22.51 against the UAE dirham by 9.16am UAE time, barely changed from the previous session. The currency had inched up to 22.50 at the open.

Advertising

[Editor's Note: For real-time forex rates, click the widget below or visit KT's dedicated Trading News page here.]

-->

"The big corporates (who are importers) are quite active on the dips (on USD/INR), which, in the current context, makes sense," a forex salesperson at a private bank said.

"Then there is the usual (dollar) demand that we see at this time of the month."

The rupee reached 22.44 (against UAE Dirham) last Thursday but has struggled since due to the demand from importers.

Anil Bhansali, head of treasury at advisory firm Finrex Treasury Advisors, said he is telling his importer clients to buy the dips on the USD/INR.

Other Asian currencies rose between 0.1 per cent and 0.4 per cent, helped by the dollar index's drop to 103.82 and the dip in US Treasury yields. The 2-year yield fell to 4.99 per cent.

A healthy risk appetite helped. China equities continued to rally after Beijing, over the weekend, introduced a package of measures to boost markets.

Investors' focus now turns to the slew of US data due later this week, which will help them assess how the economy is faring and gauge the outlook for interest rates.

Federal Reserve Chair Jerome Powell was more hawkish at Jackson Hole last Friday than he was in July, prompting investors to raise the odds of one more rate hike this year.

ALSO READ: