Rupee Gains 10 Paise to 95.33 as RBI Dollar Sales Ease Pressure
The domestic currency remained range-bound against the US dollar as central bank intervention offset pressure from elevated crude oil prices.
MUMBAI, Aug 13: The Indian rupee ended Wednesday 10 paise higher at 95.33 against the US dollar, supported by dollar sales believed to have been carried out by the Reserve Bank of India, even as higher crude oil prices weighed on the domestic currency.
The rupee had closed at 95.43 in the previous session. During Wednesday’s trade, it moved in a narrow range of 95.25 to 95.44 as state run banks were seen selling dollars, traders said.
The currency faced pressure from rising crude prices, which can increase India’s import bill and demand for foreign currency. However, intervention in the foreign exchange market helped contain volatility and supported the rupee during the session.
Market participants expect the currency to remain relatively firm in the near term. Traders indicated a possible range of 95.00 to 95.50 for Thursday.
Sentiment was also supported by an extension of a ceasefire agreement until August 17, which helped bring Brent crude futures down to around $85 a barrel. Lower oil prices could provide some relief to India’s external balance if the trend persists.
The latest movement comes as the RBI continues to focus on containing excessive volatility in the foreign exchange market rather than targeting a specific level for the rupee.
For businesses and importers, stability in the currency remains important as fluctuations in the dollar can influence the cost of crude oil, machinery, raw materials and other overseas purchases.
