The Indian rupee weakened to its all-time low on Wednesday, pressured by heightened dollar bids in the non-deliverable forwards market, while likely intervention by the Reserve Bank of India helped limit losses, traders said.
The rupee fell to 84.86 in early trading, eclipsing its previous record low of 84.8575 hit on Tuesday.
State-run banks were spotted offering dollars, most likely on behalf of the RBI, traders said.
There is “quite strong demand in NDF which is hurting the rupee,” but expect the RBI to stay active and keep intra-day losses limited to 5-7 paisa at the most, a trader at a foreign bank said.
Pressure from the NDF market also meant that the rupee was unable to benefit from a rise in most of its regional peers. Asian currencies were mostly higher, while the dollar index was steady at 106.3.
