The Indian rupee slipped to an all-time low early Monday, under pressure from a widespread supply of dollars, while a likely intervention by the Reserve Bank of India (RBI) helped limit losses, according to traders.
The rupee fell to 85.82 against the US dollar, surpassing its all-time low of 85.8075 hit in the last week of December. The currency was quoted at 85.81 at 10:15 am IST.
State banks were spotted offering dollars, probably on behalf of the RBI, according to traders.
On several occasions in the last ten days, the RBI intervened to limit the rupee’s losses around the 85.80 level after the pace of depreciation of the currency accelerated in December.
“USD/INR has historically had strong episodic depreciation clustered over a few days followed by months of stable movement,” HDFC Bank analysts said in a note.
“Given the change of guard at the RBI, we may see creativity in terms of managing stabilization at the cost of temporary bouts of rupee volatility.
The appointment of Sanjay Malhotra as RBI governor last month sparked speculation that the central bank may take a less aggressive approach to defending the rupee, especially as it is overvalued against major currencies. business partners.
Asian currencies traded mixed on Monday, while the Dollar Index remained stable at 108.9, near its highest level in two years.
Investors will closely watch the minutes of the Federal Reserve’s December meeting, which will be released on Wednesday, then the report on non-farm payrolls in the United States on Friday.
These two publications should influence investors’ expectations regarding the future evolution of interest rates from the Federal Reserve.
The dollar will also be influenced by expectations of political changes under new US President Donald Trump.
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