By Nimesh Vora
MUMBAI (Reuters) – The Reserve Bank of India’s intervention on Friday helped the rupee avoid the losses that other Asian currencies had to endure in the wake of higher U.S. yields.
The rupee was at 84.8300 to the U.S. dollar at 10:42 a.m. IST, marginally up from 84.8575 in the previous session.
Other Asian currencies were down 0.2% to 0.4%, and the dollar index inched up to add to Thursday’s advance.
The RBI likely sold dollars on Friday to support the rupee, as it tends to do often to maintain orderly moves in the currency.
The RBI is protecting the rupee “as usual”, Anil Bhansali, head of treasury at Finrex Treasury Advisors, said.
“The RBI is protecting levels of 84.87/88 for now, however, that will not change the direction of the (dollar/rupee) pair,” he said.
India’s central bank has needed to intervene almost on a daily basis to hold up a currency that is struggling amid weak Indian economic growth, a dollar that has been buoyed by the U.S. election and speculative bets.
The abatement in portfolio outflows has done little to boost the rupee. Foreign investors are net buyers of Indian equities and debt this month, per data from NSDL.
US YIELDS PUSH HIGHER
The 10-year U.S. yield rose on Thursday, and is now up about 16 basis points for the week. This is despite U.S. inflation data that is mostly quite benign and data that indicated a slight softness in the U.S. labour market.
(Reporting by Nimesh Vora; Editing by Janane Venkatraman)
