By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee was little changed on Thursday, holding above its lifetime low, supported by likely intervention from the Reserve Bank of India (RBI) amid weakness in most Asian currencies.
The rupee was at 83.9725 against the U.S. dollar as of 10:20 a.m. IST, nearly unchanged from its close at 83.9775 in the previous session. It hit an all-time low of 83.9850 last week.
U.S. consumer prices increased marginally in August, but underlying inflation showed some stickiness, dimming hopes of the Federal Reserve cutting rates by an outsized 50 basis points (bps) next week.
That weighed on Asian currencies. But the rupee held its ground, supported by state-run banks’ dollar sales, most likely on behalf of the RBI, traders said.
“The rupee continues to hold steady within a well-defined range as the RBI remains active in managing it,” Amit Pabari, managing director at FX advisory firm CR Forex said.
The RBI has routinely intervened over the last month to help the rupee remain above the key psychological support level of 84.
There is “a slight chance” of a dip below 84 over the next few days but a runaway depreciation is quite unlikely given the central bank’s grip on the currency, a trader at a foreign bank said.
Meanwhile, dollar-rupee forward premiums dipped, with the 1-year implied yield down 2 bps at 2.23%, retreating from a 16-month peak in the previous session.
U.S. jobless claims data and wholesale inflation data due later in the day will be in focus to gauge the extent of rate cuts the Fed may deliver over 2024.
(Reporting by Jaspreet Kalra; Editing by Savio D’Souza)
