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Defying extreme global volatility, the rupee managed to pull back from the early stumble and ended steady at 66.71 against the US dollar even as speculation around the Fed policy kept investors on edge.
A new poll indicated Donald Trump lead in the US presidential election, which spooked market participants. The uncertainty surrounding the outcome of the Fed’s policy decision later in the day also made financial and currency markets nervous across the globe.
The home currency largely withstood the early volatile momentum on the back of sluggish overseas cues along with smooth dollar supplies following suspected RBI intervention, a forex dealer said.
Adding to the nervousness, S&P today retained India’s rating at ‘BBB—’ with a stable outlook and ruled out any upgrade in two years, citing weak public finances, shattering the government’s hope of improved credit rating.
S&P had last in September 2014 upgraded India’s rating to stable from negative.
The rupee resumed substantially lower at 66.80 as against Tuesday’s closing level of 66.71 and drifted lower further to hit a fresh intra-day low of 66.86 on sustained dollar demand.
However, the local unit staged a smart recovery in later afternoon deals on the back of adequate dollar supply from banks and finally settled steady at 66.71, showing no change from yesterday’s close.
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