RUPEE HITS RECORD LOW AGAINST US DOLLAR: RBI STEPS IN TO CURB FURTHER DECLINE- CHECK DETAILS​​

Rupee: The Indian rupee experienced a historic drop on Tuesday, influenced by the surge in US Treasury yields and concerns over escalating tensions in the Middle East, according to a Reuters report.

Opening near an unprecedented low of 83.5350 against the US dollar, the rupee later recovered slightly to 83.4875 by 10:24 a.m. IST, following its close at 83.4500 on Monday.

RBI Intervention

Traders speculated that the Reserve Bank of India (RBI) intervened through state-run banks to stabilize the rupee's decline. Kunal Kurani from Mecklai Financial highlighted the RBI's intervention, preventing a larger depreciation of the rupee.

The dollar index reached a six-month high, while Asian currencies, particularly the Korean won and Indonesian rupiah, faced downward pressure. Asian equities also suffered, experiencing declines of up to 2.3 per cent.

The surge in U.S. Treasury yields, triggered by better-than-expected retail sales data for March, contributed to the strength of the dollar. The data suggested a robust economy, diminishing expectations of a Fed rate cut in the near term.

RBI’s Countermeasures

To counteract the rupee's decline amid the selloff in Asian markets, the Indian central bank reportedly sold dollars through state-run banks. The rupee, which touched a lifetime low of 83.5350, hovered at 83.50 against the dollar by 9:42 a.m. IST.

State-run banks, acting on behalf of the RBI, consistently offered dollars to stabilize the rupee, reflecting the central bank's proactive measures to manage currency volatility.

2024-04-16T06:25:17Z