By Jaspreet Kalra
MUMBAI – The Indian rupee was little changed on Tuesday as traders remained shy of pushing the local currency to weaker levels on expectations that the Reserve Bank of India (RBI) would intervene to prevent a sharp fall.
The rupee was at 83.4750 against the U.S. dollar as of 10:10 a.m. IST, barely changed from its close at 83.4875 in the previous session.
Most Asian currencies slipped, with the Indonesian rupiah down nearly 0.2% and leading losses. The dollar index was up slightly at 105.2 while the 10-year US Treasury yield was steady near 4.50%.
“The rupee is likely to stay in a small range with the RBI standing in between (the rupee and its) depreciation beyond 83.50,” Anil Bhansali, head of treasury at Finrex Treasury Advisors said.
Persistent dollar demand from local oil companies and likely dollar outflows have maintained pressure on the rupee over the last few trading sessions, traders said.
“There is limited appetite to go long (on USD/INR) at these levels since it’s almost certain that the RBI will step in,” a foreign exchange trader at a state-run bank said.
Traders expect the central bank to intervene to prevent the rupee from falling towards its record low of 83.5750 hit on April 19.
With the calendar relatively light on US data releases this week, the focus will be on remarks from US Federal Reserve officials for cues on when the U.S. central bank is likely to begin easing policy rates.
In recent remarks, Fed officials have emphasised that they will be data-dependent and that the current level of policy rates should cool inflation to the central bank’s 2% target.
Investors are currently pricing in nearly two rate cuts over 2024, up from the one rate cut expected before data on Friday showed that job growth had slowed more than expected in April.
(Reporting by Jaspreet Kalra; Editing by Janane Venkatraman)
