BENGALURU: The Indian rupee on Wednesday logged its worst session in a month on persistent dollar demand from importers, while traders awaited minutes from the U.S. Federal Reserve’s June policy meeting for cues on the future rate hike path.
The rupee ended down 0.25% at 82.2250 per dollar, compared to its close of 82.02 in the previous session. The currency touched its lowest level since June 15 at 82.2475.
There has been a sudden demand for dollars from importers after the rupee failed to move above 81.75 levels on likely intervention from the Reserve Bank of India early this week, traders and analysts said.
Indian rupee ends slightly lower on importers’ dollar demand
“We have got a clear breakout after the rupee was stuck in a range for weeks despite strong foreign inflows,” said Jigar Trivedi, senior analyst at Reliance Securities, adding that the currency could depreciate further.
Triggering of some stop-losses also drove the rupee lower, a trader with a public sector bank said.
The rupee forward premiums plunged to their lowest this year at 1.64%.
The dollar index, which measures the greenback against a basket of six other major currencies, was firm at 103.07.
The U.S. Federal Open Market Committee is due to release the minutes from its most recent policy meeting later on Wednesday, with markets pricing in an 86% chance that the Fed will raise rates by another quarter-point in July and a near-20% chance of another 25-basis point increase in September.
“From a market perspective, it will be key to gauge where most of the committee sees core inflation dynamics going and the scope for further tightening,” ING analysts said in a note.
“Markets will also be sensitive to any details about members’ positions on rate cuts.”
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