The Indian rupee rose on Wednesday as likely dollar sales by the Reserve Bank of India and easing crude oil prices prevented the currency from hitting a record low.
The rupee closed at 83.0725 against the U.S. dollar as compared with 83.2675 in the previous session on Monday.
Asian currencies were mixed. The Korean won and Thai bhat fell but the Malaysian ringgit climbed against the dollar.
The rupee fell to an intraday low of 83.2650 early in the session but likely dollar sales from the RBI in the non-deliverable forward and over the counter markets prevented a further decline, traders said.
The currency had hit a record low of 83.29 per dollar in October last year.
On Wednesday, exporters’ dollar sales aided the rupee’s recovery in the latter half of the session.
Later in the session, the RBI was again spotted selling dollars in a move that one trader reckoned was “preventive selling” ahead of the outcome of U.S. Federal Reserve policy outcome due later today.
If the Fed delivers a dovish pause, the rupee may strengthen to 82.80-82.90 levels, said Anindya Banerjee, head of foreign exchange research at Kotak Securities.
Otherwise, the rupee may continue to trade in a rangebound manner with the extent of depreciation dependent on what the RBI permits, Banerjee added.
The U.S. central bank is widely expected to keep rates unchanged.
The dollar index was lower by 0.11% in Asia at 105 while 10-year U.S. Treasury yield fell 2 basis points to 4.34%, off its 16-year high hit on Tuesday.
The rupee also benefited from lower Brent crude oil futures, which fell 0.95% in Asia to $93.44, down from a year-to-date high of $95.96 hit on Tuesday.
Goldman Sachs has raised its year-ahead Brent forecast to $100 a barrel from $93 earlier
