By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee closed little changed on Wednesday, despite weakness in Asian peers, as the Reserve Bank of India likely sold dollars to prevent the rupee from falling to a fresh record low.
The rupee closed at 83.22 against the U.S. dollar compared with a close of 83.23 in the previous session.
Most Asian currencies weakened versus the greenback with the Thai baht leading losses with a 0.51% decline.
Likely consistent dollar supply from India’s central bank helped the rupee hold its ground, traders said.
The RBI wasn’t aggressively selling dollars but was seen offering the currency at 83.23-83.24 levels via state-run banks, a foreign exchange trader at a state-run bank said.
The dollar index climbed to a fresh near 10-month high at 106.34 in Asia hours, amid prospects of higher-for-longer policy rates in the U.S.
Brent crude oil futures rose over 1% to $94.94 per barrel.
The rupee fell to a low of 83.24 on Wednesday. The currency’s record low of 83.29 was hit in October 2022.
Still, concerns that the unit may slip against the dollar prompted importers to raise their hedging to guard against such depreciation, traders said.
There was also month-end dollar demand from local companies, traders added.
The range of 82.80 and 83.30 on the rupee “is still intact,” Gaurang Somaiya, a foreign exchange analyst at Motilal Oswal Financial Services, said.
The rupee won’t fall sharply until the upcoming monetary policy decision in India, due Oct. 6, he added.
Investors will keep an eye on whether FTSE Russell includes India in its emerging markets government bond index. The decision is expected on Sept. 28.
Indian foreign exchange and debt markets will be closed on Friday for a local holiday.
(This story has been officially corrected to say that the market holiday was on Friday, not Thursday, in paragraph 14)
(Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala)