Five traders told Reuters that the Reserve Bank of India was probably selling dollars on Tuesday to help the rupee, which was being hurt by dollar bids because of the maturity of positions in the non-deliverable futures (NDF) market and a weak global risk appetite. As of 11:30 am IST, the rupee was up a little for the day at 87.2850 versus the US dollar. At the beginning of the session, it dropped to 87.3850.
According to traders, state-run banks were observed offering dollars at values close to 87.30, most likely on behalf of the RBI. A bank trader said it “looks like they will be active until the mid-day fixing window, after which it (USD/INR) could move higher.
The rupee is under pressure when NDF investments mature because there is usually a greater desire to purchase dollars at the daily reference rate. So far in March, the dollar index has dropped by over 3%. With President (Donald) Trump vacillating on his tariff policy, tax exclusions and delays may also continue to depress the value of the US dollar, according to a note from MUFG Bank.
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