Rupee recovered from low record to end flat after the possibility of RBI intervention

Indian Rupee recovered from its lowest record to end unchanged on Monday, assisted by the possibility of intervention from the Reserve Bank of India to the next section of the session, according to traders.

Rupees ended at 88,1950 with US dollars, identical to the closure of Friday. The currency fell 0.7% in August, the fourth monthly decline in succession.

Rupee plummeted to the lowest new record of 88.33 on the previous day, reflecting concerns to increase the higher US tariffs on Indian goods and broader economic implications for South Asian countries.

“Today is a US holiday there is a thin liquidity, so the flow has the power to create an unusual movement in the currency,” said Kunal Sodhani, Vice President at Shinhan Bank India.

“Overall, the weakness of Rupees can survive to maintain export competitiveness. For USD/INR, 87.94 now act as important support, which was previously the highest of all time, while the level of 88.50 can be tested.”

This unit is the worst performing Asian currency from the-date year, down about 3% of the dollar, and its low performance is expected to continue when Indian goods face the highest US tariffs among Asian countries.

Higher rates tend to drag the competitiveness of the country’s exports, and the slowing of exports can burden the company’s revenue and profits.

Indian trade balance and broader growth prospects can also be affected, forcing foreign portfolio investors to reconsider allocations to Indian equity.

Foreign investors have withdrawn $ 2.4 billion from Indian equity during the last three sessions, and sustainable outflows are expected to worsen volatility in the currency market and equity.
Source: Reuters (reporting by Dharamraj Dhutia; Editing by Eileen Soreng)