Rupee steadies near two-week highs around 95.4 per dollar
Indian rupee held near two-week highs around 95.4 per dollar after the holiday break. Lower oil prices and frequent Reserve Bank of India intervention offset expectations of a Federal Reserve rate hike, while importer dollar demand persists.
The Indian rupee steadied to around 95.4 per dollar, hovering near two-week highs after the holiday break as lower oil prices and sustained Reserve Bank of India intervention offset expectations of a Federal Reserve rate hike next month and persistent dollar demand for hedging.
The rupee had settled 0.35% higher on Tuesday before FX and money markets closed for a holiday on Wednesday.
Brent crude extended its decline to around $87.30 a barrel, while the RBI has intervened almost daily over the past two weeks, particularly when USD/INR moved toward the 95.60-95.80 range, limiting gains in the dollar.
Meanwhile, the dollar index held near an eight-day high after US inflation data revived expectations of a September Fed rate hike, with markets awaiting Fed Chair Kevin Warsh's speech at Jackson Hole for further clues on the interest-rate outlook.
Persistent importer dollar demand is also expected to limit further downside in USD/INR.