By Dharamraj Dhutia and Nimesh Vora
MUMBAI (Reuters) – The Indian rupee posted its biggest single-day gain in nearly a month and a half on Tuesday, as the greenback eased from recent peaks amid some rebound in global risk appetite while late dollar inflows also aided.
The rupee closed at 82.9350 per U.S. dollar, 0.2% stronger than its close of 83.1075 on Monday.
“Inflows for initial public offerings and presence of the central bank around 83.10 levels ensured some strength in the rupee after nearly two weeks of fall,” said Anil Bhansali, head treasury at Finrex Treasury Advisors.
Companies such as Pyramid Technoplast, Aeroflex Industries and Vishnu Prakash R Punglia, among others, are in the process of raising funds via an initial public offering over the next two weeks.
The easing of the dollar index also aided in helping the rupee strengthen past the 83 mark, a trader with a private bank said.
The U.S. dollar index, which measures the currency against six developed-market counterparts, was down 0.25% at 103.06, below Friday’s 10-week high of 103.68.
Another trader said the market has resigned to the fact that the central bank was unlikely to let the rupee fall towards its record low of 83.29 and thus the local unit is seen hovering around the 83-level in the near term.
“A large foreign bank was mainly on the selling side,” the private bank trader added.
Traders said risks of the rupee’s record low being breached remain but they will now focus on the Jackson Hole conference.
Fed Chair Jerome Powell’s speech at Jackson Hole will be heavily scrutinised to gauge the likely path for interest rates. Powell’s comments will come at a time when longer maturity U.S. yields have surged on expectations that the Fed will keep rates higher for longer.
India’s central bank ensured the rupee did not depreciate significantly despite immense dollar-buying pressure from oil companies, Bhansali said.
(Writing by Swati Bhat; Editing by Janane Venkatraman)