India Rupee Snaps 3-Day Rise On Suspected RBI Intervention

India Rupee Snaps 3-Day Rise On Suspected RBI Intervention

03 Jun 2020 02:34 PM

The Indian rupee fell for the first time in four sessions against the U.S. currency, as consistent dollar demand from state-run banks, likely for the central bank and importers, outweighed the impact of strong shares and a weak dollar index.

The rupee was at 75.46 to the dollar at 2.00 p.m. compared with 75.36 yesterday.

The rupee was very choppy in today’s session and traded in a wide band of 75.03 to 75.51. The unit had opened higher and hit an over one-month high of 75.03, but dollar purchases by state-run banks around 75.06 to 75.20 levels and around 75.32 to 75.36 levels, likely for the Reserve Bank of India, pushed the rupee lower, traders said.

Kotak Securities said that “a heavy-handed intervention” by the RBI may stall an appreciation in the rupee above 75 levels. India’s foreign exchange reserves rose to a record high of $490.04 billion as of the week ended May 22 from $487.04 billion at the end of the prior week, RBI data showed.

Equities, helped by reopening measures and supportive policies, have shrugged off a host of worries from the coronavirus pandemic to the U.S.-China discord and the growing U.S. civil unrest over the death of a citizen in police custody.

The strength in equities dragged the dollar index to 97.29 today, its lowest level in nearly three months.