Rupee ends unchanged as it fails to benefit from rise in Asian currencies
MUMBAI, Aug 26 (Reuters) – The Indian rupee closed almost unchanged on Monday as dollar demand from importers and foreign banks offset initial gains from a rise in most Asian currencies.
The rupee closed at 83.90 against the US dollar, almost unchanged from the previous session’s close of 83.89. In early trade, the currency touched a high of 83.81.
Like last week, the rupee failed to sustain its gains due to dollar demand from importers and foreign banks, a trader at a private bank said.
According to Amit Pabari, managing director of foreign exchange advisory firm CR Forex, the rupee is likely to trade between 83.75 and 84 in the short term.
Strong dollar demand from importers and capital outflows from the stock market have helped limit the rupee’s gains in recent trading days, Pabari said. Foreign investors have withdrawn around $2 billion from Indian equities so far in August.
The dollar index was at 100.7, near its lowest since December, while most Asian currencies rose 0.1 to 0.7 percent.
Meanwhile, forward premiums on dollar-rupee contracts jumped after Powell’s more dovish-than-expected comments increased the likelihood of a deeper rate cut at the Fed’s September meeting.
The 1-year forward premium for the dollar and rupee rose to a high of 2.14%, the highest since May 2023, before declining slightly.
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Reporting by Jaspreet Kalra; Editing by Nivedita Bhattacharjee
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