Now Reading: Rupee opens at 95.36, RBI intervention curbs fall
-
01
Rupee opens at 95.36, RBI intervention curbs fall
The Indian rupee opened at 95.36 against the US dollar on Thursday, down 3 paise from the previous close, as persistent dollar demand from hedgers weighed. Reserve Bank of India intervention, including…
The Story in Brief
The Indian rupee opened at 95.36 against the US dollar on Thursday, down 3 paise from the previous close, as persistent dollar demand from hedgers weighed. Reserve Bank of India intervention, including dollar sales through state-run banks, kept the currency within narrow bounds. The rupee closed at 95.44, down 0.1%, according to The Hindu Business Line.
Domestic retail inflation rose to 4.45% in July, within RBI’s target range. Foreign inflows of nearly $1.8 billion in equities and $210 million in bonds provided some support. However, uncertainty over the Strait of Hormuz, elevated US Treasury yields near 4.65%, and a wide merchandise trade deficit of $31.98 billion in July continue to pressure the currency.
The Indian Opinion
The narrative that RBI intervention is merely propping up the rupee misses a larger point. Without the central bank’s steady hand, the currency would likely have overshot given crude oil imports and the $32 billion trade deficit. The real test is whether foreign inflows can sustain at recent levels to offset external pressures. If oil prices spike further due to Strait of Hormuz tensions, can RBI defend 96.20 without draining reserves?
Sources (2): livemint.com, thehindubusinessline.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
