The Indian rupee, which started trading lower on Thursday due to concerns about the increase in US Treasury yields, found support from dollar offers from public sector banks. At 9.10am UAE time, it was at 83.4150 to the US dollar (22.729 against the UAE dirham) after opening at 83.42 (22.73), compared with 83.3450 (22.71) in the previous session.
According to a foreign exchange salesperson at a large bank, public sector banks are offering the dollar/rupee pair, although it is uncertain whether the offers are for the RBI (Reserve Bank of India) or their clients. The intention, if for the RBI, is not to force the dollar/rupee rate down, as expected by currency traders accustomed to regular RBI intervention at specific levels.
It is widely anticipated that the RBI will prevent the rupee from dropping below the 83.50 mark. Meanwhile, other Asian currencies, such as the Korean won, Indonesian rupiah, and Thai baht, experienced greater declines, influenced by a further increase in US Treasury yields due to concerns regarding the demand-supply imbalance and subdued demand for risk assets.
Thursday's potential decline would mark the fourth consecutive day of losses for the rupee. Anxiety over the results of Indian elections, a cautious approach taken by importers, and the departure of short (dollar) positions were cited as factors contributing to the recent depreciation of the rupee by a currency dealer at a bank.
