MUMBAI: The Indian rupee ended slightly lower on Friday as intermittent US dollar-selling intervention by the central bank prevented sharp losses, but the local unit closed weaker for a third consecutive week on the back of broad strength in the greenback.
The rupee closed at 83.2625 against the US dollar, slightly weaker than its previous close of 83.2425. The local unit posted a weekly loss of 0.1%, marking its third consecutive week of decline.
The Reserve Bank of India (RBI) was likely active through much of the session, keeping the rupee from weakening further, a foreign exchange trader at a private bank said. The rupee hovered between 83.27 and 83.2350 during the session.
Closer to the start of the spot trading session as well, the RBI likely sold US dollars near 83.25 levels, traders said. The dollar index was little changed at 106.5, but has cooled off last week’s peak above 107, which marked its highest level since November 2022. The 10-year US treasury yield slipped to 4.64% in Asia.
India’s merchandise trade deficit for September came in lower than expected at $19.37 billion against expectations of $23.25 billion. The RBI is likely to keep defending the rupee unless the military conflict in the Middle East escalates, said Alok Sharma, associate vice president of treasury at ICBC Bank.
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