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Rupee rises as RBI dollar sales seen near market open
Rupee strength followed a sharp INR drop on Wednesday after the central bank’s monetary policy announcement, with USD/INR trading near 96.72.
The Indian rupee opened modestly higher versus the US dollar on Thursday, as markets looked to possible Reserve Bank of India intervention, with Reuters citing four traders who said the central bank likely sold US dollars near the market open to support the currency.
The RBI’s action was highly anticipated after the rupee fell sharply against the dollar on Wednesday following the central bank’s monetary policy announcement, Reuters said. At the time of writing, USD/INR was around 96.72, close to Wednesday’s high near 96.85 and near the all time high around 97.00.
The report also pointed to the risk that currency weakness and higher global interest rates could complicate the RBI’s gradual tightening path. Separate Reuters coverage noted signs of oil price recovery after a tanker north of Qatar was hit by projectiles, a development that had weighed on energy prices in recent weeks.