The Reserve Bank of India once again stepped in near the start of Friday’s session to support the rupee and kept up its intervention through the session, traders said, helping the currency shrug off higher oil prices and weakness in Asian currencies.
The rupee opened slightly higher at 94.46 per dollar compared with 94.4850 on Thursday, and has remained largely rangebound since.
Pre-market indications had pointed to a weaker start.
The RBI has repeatedly sold dollars near the open all through this week, preventing the rupee from tracking weaker indications, bankers said.
The central bank’s increasingly forceful intervention comes amid its special schemes having drawn more than $136 billion, far exceeding expectations and providing the rupee a buffer.
Its persistent presence has reinforced expectations that the central bank is using its increased firepower to steer the rupee higher.
The RBI was setting the tone for the day at the open, trader said.
Its “repeated presence” in the market this week has left little doubt that it is leaning toward a higher rupee, he said.
The rupee is up nearly 1 per cent this week despite a rally in oil prices, which are on track for the steepest weekly advance since mid-July on rising tensions and renewed US-Iran hostilities.
Brent crude inched past $96 a barrel in Asia trading.
Attention will now turn to key US data ahead of the Federal Reserve’s September 15-16 meeting, with nonfarm payrolls due later on Friday and inflation data next week likely to shape expectations for the central bank’s policy path.
Whether the Fed hikes rates at the meeting or stays on hold is now effectively a coin toss, making the incoming data particularly important for the dollar.
