Unews World
MUMBAI: Central bank intervention may have helped the rupee strengthen by 71 paise on Tuesday – its biggest single session gain in over two years – to close below the 87-to-the-dollar mark for the first time since February 3.
After sliding for days, RBI reportedly intervened in the forex market late on Monday and also through the day on Tuesday. At close, the rupee was at 86.76, up from 87.47 on Monday.
The ongoing trade war through imposition of tariffs that was started by the new US President Donald Trump, the strength of the dollar against several other currencies, and the continuous selling by foreign funds in the stock market have been weighing on the rupee, traders and analysts said.
“The rupee appreciated against the dollar on Tuesday on RBI’s aggressive intervention,” said Sriram Iyer of Reliance Securities. “The intervention may have been done to deter speculative short positions in the rupee.”
There were reports that the total quantum of the central bank’s intervention could have been worth up to $13 billion over the last two days. In the overseas markets, the dollar index – a measure of the greenback’s strength against a basket of major currencies – eased marginally on Tuesday afternoon in Asian trading ahead of US Fed chief Jerome Powell’s testimony over the next two days and ahead of CPI data this week, said Iyer.
