By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee ended little changed after trading in a narrow band on Monday, on likely dollar-selling intervention by the central bank which helped the currency navigate the decline in its the Asian peers.
The rupee closed at 83.1075 per U.S. dollar compared to its close of 82.1025 on Friday. On the other hand, the Chinese yuan, the Korean won and the Indonesian rupiah dropped 0.3% to 0.4% each.
The Reserve Bank of India likely sold dollars in the NDF (non-deliverable forward) and the OTC markets to prevent the rupee from falling towards its record low of 83.29 that it hit in October last year.
Over the past few sessions, the USD/INR has been holding within a range of 83.00 to 83.20, SMC Global Research said in a note.
A breakout from the longstanding resistance of 83 signifies the dollar’s uptrend, SMC report said.
The offshore Chinese yuan dropped to 7.3360 to the dollar, not far from its year-to-date low. The currency, pressed by worries over Sino-U.S. interest rate differentials and China’s growth outlook, has dropped more than 2.5% this month.
China cut its one-year benchmark lending rate on Monday, with authorities seeking to ramp up efforts to stimulate credit demand.
The rupee is down about 1% and the dollar index is up 1.5% in August.
The dollar has got a lift from the increase in U.S. yields. The 10-year U.S. yield has surged on expectations that the resilient economy will make the Federal Reserve will keep interest rates higher for longer.
Fed Chair Jerome Powell’s speech this week at the Jackson Hole Economic Symposium will be watched for cues on what lies ahead for rates.
(Reporting by Nimesh Vora; Editing by Savio D’Souza)