Rupee ends at record closing low despite cenbank intervention

By Jaspreet Kalra

MUMBAI (Reuters) – The Indian rupee ended at a record closing low on Thursday, despite the central bank’s likely intervention, as elevated U.S. treasury yields and weakness in other Asian currencies weighed on the local unit.

The rupee ended at 83.21 against the U.S. dollar, compared with 83.1325 in the previous session. The unit touched a session low of 83.2175, not far from the record low of 83.29 it hit in October last year.

The Reserve Bank of India (RBI) was likely selling dollars near the 83.20 level, said a foreign exchange trader at a state-run bank.

The RBI has also been intervening in the non-deliverable forward (NDF) market to prevent a fresh all-time low.

Asian currencies fell, with the Korean won leading losses, while the onshore Chinese yuan ended its domestic session at its weakest since 2007.

The dollar index was up by 0.12% at 104.99, while the 10-year U.S. treasury yield was at 4.27% in Asia hours.

The RBI’s intervention notwithstanding, the rupee is likely to stay very close to its record low over the next six months, a Reuters poll showed.

However, it is unlikely to breach that mark in the near term, according to Sajal Gupta, head of foreign exchange and rates at Edelweiss Financial Services.

Given that the dollar index was at 112-113 when the rupee hit its record low last October, the currency may yet display some resilience, helped by the RBI, Gupta said.

U.S. initial jobless claims data for the previous week is due later in the day and will give fresh insight into the strength of the job market, which is a key determinant of the Federal Reserve’s monetary policy path.

(Reporting by Jaspreet Kalra; Editing by Savio D’Souza)