MUMBAI (Reuters) -The Indian rupee’s calm stretch extended into Thursday, with the currency barely moving amid Reserve Bank of India likely anchoring price action.
The rupee was at 88.78 per U.S. dollar at 11:28 a.m. in Mumbai, barely budging from Wednesday’s level. The pair remained within a four-paisa band, mirroring the calm that has defined trading through the week.
The 88.80 level has emerging as a key the level the RBI seems determined to defend. Bankers said the central bank’s dollar sales near that threshold have kept the dollar/rupee from breaking higher.
The rupee’s range bound trade this week contrasts with broader moves in the dollar and across the region. The dollar index has advanced, helped by a sharp slide in the Japanese yen, while price action across Asian currencies has been choppy.
The rupee’s muted response underscores how the RBI’s steady hand has dulled its sensitivity to regional swings, with bankers noting that its reaction to shifts in the dollar and Asia FX sentiment has been almost non-existent.
“The market knows where the RBI line sits,” said a trader at a private bank. “Every time we come near to 88.80, offers (on dollar/rupee) pile up.”
Despite a firmer dollar index and foreign equity outflows, the RBI’s intervention has prevented the rupee from weakening. Market participants say the central bank appears comfortable managing a slow, controlled depreciation.
Importer demand for dollars has remained robust, especially from oil companies, while exporter sales have been sparse, an FX salesperson at a bank said.
(Reporting by Nimesh Vora; Editing by Sonia Cheema and Ronojoy Mazumdar)
