Indian Central Bank

Indian Central Bank Intervenes to Boost Rupee Against US Dollar

The Indian central bank likely sold US dollars on Thursday to keep the rupee above the crucial support level of 84, according to five traders speaking to Reuters.

The rupee was trading at 83.97 per US dollar, slightly up from its previous close of 83.9775. Last week, the local currency had hit an all-time low of 83.9850.

According to a trader at a foreign bank, state-run banks were seen offering dollars, likely on behalf of the Reserve Bank of India, in "small lots" around the 83.97-83.98 levels.

Traders reported that the RBI has consistently intervened to support the rupee around these levels over the past month.

Asian currencies mostly declined on Thursday after stronger-than-expected US inflation data dampened expectations of a 50-basis-point rate cut by the Federal Reserve next week.

On Wednesday, the rupee settled 1 paisa lower at 83.99 against the American currency. According to the Economics Times CR Forex Advisors MD Amit Pabari said, "The central bank has been steadily absorbing inflows, and unless the RBI eases its grip, the rupee is likely to stay within this range. In the near term, the rupee is expected to trade within a narrow band of 83.80 to 84.05, while the medium-term outlook slightly broadens the range to 83.70 to 84.05."