Traders said the Reserve Bank of India’s possible intervention helped the Indian rupee avoid plunging to an all-time low, and as a result, the currency was almost flat on Wednesday.
As of 10:00 a.m. IST, the rupee was trading at 83.56 against the US dollar, hardly moving from its close of 83.5650 during the previous session. According to traders, before the local spot market opened at 9:00 a.m. IST, the RBI most likely intervened in the non-deliverable forwards (NDF) market to support the rupee.
The NDF market is one of the regular venues where the RBI has intervened to support the currency in recent trading sessions.
At a press conference on Friday following the monetary policy announcement, RBI Governor Shaktikanta Das stated that the RBI’s interventions in the NDF market have “changed… We are now very clear and explicit that the RBI is there in the forward market.”
According to a previous report by Reuters, the central bank has shifted its strategy for reducing rupee volatility, favoring non-deliverable forwards over spot market interventions.
Local oil companies are putting in dollar bids, but since the RBI has “signalled to the market” that it will stop further weakness, the currency will probably remain in a narrow range. a trader of foreign exchange.
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