Home Business Rupee weakens slightly to 82.39 as RBI steps in to limit further...

Rupee weakens slightly to 82.39 as RBI steps in to limit further losses

Rupee weakens slightly against stronger dollar ahead of key US inflation data

The rupee weakened on Thursday as the Reserve Bank of India moved to limit further losses in the domestic currency against a firmer dollar to hedge risk, driven by fears that geopolitical tensions and aggressive The rate hike will push the global economy into recession.

Financial markets are watertight as traders await directions from US inflation data that will be released later on Thursday.

According to Bloomberg, the rupee was changing hands at 82.3925 per dollar, after opening at 82.2800 as compared to its previous close of 82.3112.

The rupee fell by 6 paise to temporarily close at 82.39 against the US dollar, PTI reported.

The domestic currency’s trading range 82.2563 to 82.4175 suggests that it has maintained its base against the stronger dollar, extending a stable pattern seen this week on RBI intervention.

Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors said, “Rupee has remained relatively stable during the day as RBI continues to sell at $82.40 level today as the market awaits US CPI data.”

“The communication of RBI to banks not to take any position did not have the desired effect as buying and hedging by importers continued and demand for dollars continued unabated,” he said.

A Reuters report quoting bankers and traders showed that the RBI asked local banks to refrain from taking any further positions of the rupee in the offshore market in its fight to contain the dramatic fall of the rupee this year.

This is the most recent action by the Indian central bank, apart from selling dollars through state-owned banks in the spot and futures markets, burning nearly $100 billion of its foreign exchange reserves since Russia invaded Ukraine in late February.

Rising food and fuel costs pushed India’s retail inflation to 7.41 per cent last month, the highest level since April, further straining an already tight household budget.

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