By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee traded in a narrow band and closed little-changed on Thursday as likely intervention from the Reserve Bank of India limited losses in the currency.
The rupee ended at 83.28 against the U.S. dollar, compared with its close at 83.2725 in the previous session. It remained in a tight range between 83.26 and 83.29 during the day’s session.
The RBI likely sold U.S. dollars near 83.28 levels to prevent further losses in the local unit, three traders said.
The Indian currency has failed to benefit from a fall in U.S. yields and crude oil prices as local dollar demand stayed strong. On the flip side, routine interventions from the RBI have kept a lid on depreciation.
“It’s only a matter of time till you see a sizeable move,” a foreign exchange trader at a private bank said, referring to the rupee’s quiet run over the last few weeks.
The rupee has been range-bound between 83 and 83.2950 since the last week of September.
Asian currencies weakened slightly, while the dollar index was little changed at 105.6. Brent crude oil futures last quoted higher at $80.35 but have declined about 8% in November so far.
The sentiment has turned a bit positive for the rupee but it is unlikely to benefit sharply in the near term, said Arnob Biswas, head of foreign exchange research at SMC Global Securities.
Meanwhile, rupee forward premiums fell across tenors. The one-year implied yield fell to 1.54%, its lowest since early-July, and near forwards were at the lowest in more than a decade.
Concerns regarding inadequate dollar liquidity have negatively impacted both near and far forward premiums.
Investors now await remarks from U.S. Federal Reserve Chair Jerome Powell due to speak later on Thursday. The U.S. will also report initial jobless claims data later in the day which will offer cues on how the country’s labour market is faring.
(Reporting by Jaspreet Kalra; Editing by Nivedita Bhattacharjee)