The Indian rupee recouped opening losses to end higher on Friday, despite weakness across regional peers, helped by possible intervention from the Reserve Bank of India (RBI) and dollar sales from foreign banks.
The rupee ended at 83.4700 to the U.S. dollar, up from 83.5375 in the previous session. The currency dropped to a record low of 83.5750 in early trading, but the RBI likely intervened in the onshore over-the-counter market and in non-deliverable forwards to curb further fall, traders said.
For the week, the rupee logged a second consecutive weekly decline, falling about 0.1%.
Most Asian currencies dropped, with the Korean won leading the losses, on reports that Israel attacked Iran in the latest tit-for-tat exchange between the two adversaries.
“It seems like there are no green shoots for the rupee, but if geopolitical risks fade in the coming weeks, we may see the rupee trading in a range of 83.20 to 83.80 albeit with a negative bias,” Arnob Biswas, head of foreign exchange research at SMC Global Securities said.
Economists at HDFC Bank said in a note that a move towards 83.70 on the rupee is “coming in sight”.
Investors are also watching out for cues on U.S. interest rates. The hawkish tone of Federal Reserve officials has prompted investors to dial back interest rate cut expectations for this year.
Core personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, due next week, will be watched for cues on the policy path.
