By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee was little changed on Friday, and is on course for its smallest annual percentage change in 20 years, on the back of sustained foreign exchange interventions from the Reserve Bank of India.
The rupee was at 83.1550 against the U.S. dollar as of 10:30 a.m. IST, compared to its previous close at 83.1650.
The rupee is down about 0.4% year-on-year, the smallest percentage change in at least the last 20 years.
An uptick in Asian currencies helped the rupee gain on Friday, amid growing U.S. interest rate cut expectations.
The dollar index was steady near 101.2 after recovering slightly from a 5-month low, but is down about 2% in December so far, extending its 3% decline in November.
Even though the local unit hit a record low of 83.42 in 2023, it’s depreciation was sharply milder compared to its drop of about 10% last year.
The rupee remained largely steady in the face of volatility in global cues amid the RBI’s interventions via spot, forwards, non-deliverable forwards, and futures markets, traders said.
The rupee is likely to stay in its “prevailing zone” on Friday, wedged between month-end importer dollar demand and broadly positive Asian cues, a forex trader at a foreign bank said.
The rupee’s stickiness has also hurdled gains amid dollar weakness and a sharp pickup in inflows into India markets towards the end of the year.
Overseas investors bought Indian equities and bonds worth$27.8 billion over 2023, about $9.3 billion of which was in December alone, according to NSDL data.
“Rupee has been moving amidst thin holiday trades and is expected to be in a range of 83.05 to 83.30 (on Friday),” Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors said.
(Reporting by Jaspreet Kalra; Editing by Varun H K)