Yahoo Finance INDIA RUPEE-Rupee ends unchanged amid likely cenbank intervention
By Anushka Trivedi
MUMBAI, Oct 17 (Reuters) - The Indian rupee ended flat on Monday, while its Asian counterparts dropped on recession fears, as the Reserve Bank of India's likely intervention continued supporting the local currency.
The partially convertible rupee closed unchanged at 82.35 per dollar, having traded in an extremely narrow six paisa range all session.
The RBI was likely selling dollars and receiving forwards through state-run banks as the central bank tries to keep the currency around 82.40 levels, traders said.
The forwards market had been quite "volatile," said a Mumbai-based trader. The USD/INR 1-year forward implied yield dropped to 2.45%, its lowest since November 2011, from 2.55% on Friday.
"Earlier they (RBI) were intervening in the spot market and spending their foreign exchange reserves. But by intervening in forwards, they will not use their FX reserves much, as this is more of a dollar supremacy story," said Sugandha Sachdeva, VP of commodity and currency research at Religare Broking.
The overarching trend is still negative for the rupee, but in that we might see some relief because equities are trading positively and crude prices and the dollar index are down, she said, adding the rupee might appreciate a tad in the coming days.
The RBI's continuous presence has been a big support to the rupee as it has been in the market most days since last Monday, when the rupee hit a record low of 82.6825, as per traders.
India's foreign exchange reserves rose for the first time in two months in the week ended Oct. 7, increasing by $204 million over the period to $532.87 billion. Reserves were still down 17% compared to its peak of $642.5 billion last year.
Meanwhile, in broader markets, Asian currencies posted major losses after last week's red-hot U.S. inflation print reinforced fears of a global recession on assumptions of aggressive hikes by the Federal Reserve. (Reporting by Anushka Trivedi in Mumbai; Editing by Savio D'Souza)
