Rupee closes 0.3% up against dollar, touches intraday high of 64.59
The Indian rupee on Friday appreciated 0.3 percent against the dollar, tracking gains in other emerging market peers.
Pranay LakshminarasimhanMoneycontrol News
The Indian rupee on Friday appreciated 0.3 percent against the US dollar, tracking gains in other emerging market peers.
Emerging market currencies like the South African rand, Russian ruble, South Korean won, Turkish lira, Indonesian rupiah, and Malaysian ringgit all appreciated between 0.2 percent to 1.0 percent vis-à-vis the dollar.
The dollar index, which measures the strength of the dollar against a basket of six other global currencies, fell by over 0.5 percent on Friday to 97.34.
State-owned banks were the primary sellers of the greenback on Friday, mainly on behalf of the Reserve Bank of India (RBI), which was looking to curb volatility in the market, dealers said.
The rupee moved in a wide range, touching an intraday high of 64.59 and an intraday low of 65.02 during the session. It closed at 64.64 to the dollar, up 21 paise from its previous close of 64.85.
A dealer with a Japanese bank said that a large corporate was seen buying the dollar heavily in early trade, because of which the rupee briefly weakened to above 65 to the dollar. However, at that level, the RBI started selling the dollar and continued doing so for the rest of the session.
Another dealer for a large state-owned bank said that apart from domestic banks, some custodian banks were also seen selling the dollar, most likely for their foreign portfolio investor clientele.
“The weakness that we saw yesterday among EM currencies was driven by a political development in the US, and sell-offs that are triggered by political developments usually don’t last very long,” said Anindya Banerjee of Kotak Securities.
“Yesterday we saw some unwinding of positions by investors who were in it for the carry. The carry-trade unwind came and went like a monsoon cloud and what we saw today was fresh long positions being built.”Analysts expect the rupee to trade in a wide range next week, most likely between 64.30 and 65.10 to the dollar. It is unlikely that the rupee would depreciate beyond 65.10 as the RBI is seen intervening, should it happen.