Home Business Rupee flat at $82.75, as RBI steps in to limit any sharp...

Rupee flat at $82.75, as RBI steps in to limit any sharp losses

Rupee flat at 82.75 per dollar

The rupee fell flat against the Qing dollar on Friday, even as Treasury yields rose as the Reserve Bank of India stepped in and made any sharp gains after the currency crashed to a new all-time low in the previous session. Damage limited.

Bloomberg showed that the rupee was changing hands at 82.7437 per dollar after opening slightly weaker at 82.82 as compared to the previous close of 82.7538.

According to PTI, the rupee gained 4 paise to close at 82.75 against the US dollar.

“Rupee was in the range of 82.60 to 82.90 per dollar after opening weak on higher US yields. But RBI was active throughout the day to ensure that it does not weaken further. US 10-year yield has been over 4.25 per cent – 14-year high – keeping the dollar bidding well against most Asian currencies, which has been weak for the greenback,” said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors.

“Equity saw marginal profit-booking while (US) Dow futures were down 150 points. It has generally been risk averse today with most equity markets falling,” he said.

After hitting a record low of 83.2925 against the greenback on Thursday, Reuters reported that Indian exporters were holding off on selling the dollar on anticipation of a further fall in the rupee.

On Wednesday, the rupee dramatically crossed the 83-to-dollar range for the first time as the RBI stopped supporting it at the 82.40 level.

“We are advising exporters to only partially hedge about 15-20 per cent of their exposure,” a treasury sales executive at a large private bank told Reuters.

The aggressive rate hike trajectory of the US Federal Reserve, rising domestic current and trade account deficits, and foreign investors continuing to sell riskier assets on concerns of a global recession are some of the problems the rupee is facing.

The RBI is intervening in both the spot and future markets to protect the rupee from a steep fall.

As a result of RBI’s buy/sell swaps in the futures market, dollar selling has become even less attractive, causing forward premiums to fall to their lowest levels in more than a decade.

In line with its Asian competitors, the rupee has lost about 12 per cent of its value against the dollar.

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