The Indian rupee weakened moderately on Thursday and ended at 83.952 versus the US dollar due to dollar demand from local banks and corporates. A moderate rise in the dollar index also added to the weakness in the rupee.
The local currency ended weaker by 3 paisa, ending at 83.95 versus the US dollar, as against its previous close of 83.922/$1, LSEG data showed. The rupee moved in a tight band of 83.937/$1 and 83.965/$1 on Thursday.
Dollar demand from local companies could be for buying by oil, FPIs or by the government for debt payment and defence, traders said. It could also be on behalf of the Reserve Bank of India (RBI)
The dollar index rose by 0.1% to 101.2 after falling to its weakest level since December earlier this week, according to Reuters.
Downward revisions made to the US payroll (employment) data and after the minutes of the US Federal Reserves’ July meeting, the Fed is on track to cut rates in September.
“If the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” the minutes said.
