The Indian rupee rose on Wednesday as likely dollar sales by the Reserve Bank of India and easing crude oil prices prevented the currency from hitting a record low.
The rupee closed at 83.0725 against the US dollar as compared with 83.2675 in the previous session on Monday.
Asian currencies were mixed. The Korean won and Thai bhat fell but the Malaysian ringgit climbed against the dollar.
The rupee fell to an intraday low of 83.2650 early in the session but likely dollar sales from the RBI in the non-deliverable forward and over the counter markets prevented a further decline, traders said.
The currency had hit a record low of 83.29 per dollar in October last year.
Also read: Nifty at all-time high, but not on valuations?
On Wednesday, exporters' dollar sales aided the rupee's recovery in the latter half of the session.
Later in the session, the RBI was again spotted selling dollars in a move that one trader reckoned was "preventive selling" ahead of the outcome of US Federal Reserve policy outcome due later today.
If the Fed delivers a dovish pause, the rupee may strengthen to 82.80-82.90 levels, said Anindya Banerjee, head of foreign exchange research at Kotak Securities.
Otherwise, the rupee may continue to trade in a rangebound manner with the extent of depreciation dependent on what the RBI permits, Banerjee added.
The US central bank is widely expected to keep rates unchanged.
The dollar index was lower by 0.11 per cent in Asia at 105 while 10-year US Treasury yield fell 2 basis points to 4.34 per cent, off its 16-year high hit on Tuesday.
The rupee also benefited from lower Brent crude oil futures, which fell 0.95 per cent in Asia to $93.44, down from a year-to-date high of $95.96 hit on Tuesday.
Goldman Sachs has raised its year-ahead Brent forecast to $100 a barrel from $93 earlier.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.