MUMBAI: The Indian rupee rose slightly in early trading on Friday, taking comfort from a softer US dollar and a further decline in oil prices.
The rupee was at 83.21 to the dollar by 09:45 a.m. IST, compared to its previous close of 83.25.
The dollar index pulled back from recent highs and was last near 106.40.
Brent crude, which last week reached near-$98 a barrel, dropped to $84.40 on worries over demand.
The Reserve Bank of India has managed to prevent the rupee from slipping to a record low by persistently intervening in spot and non-deliverable forwards, according to traders.
“You can argue that the decent correction in oil alongside what RBI has been doing makes longs (on USD/INR) ill-founded, at least at the margin,” a forex trader at a mid-sized bank said. “Difficult to see any big moves in the rupee for now. Maybe, US jobs data will change that.”
The widely-followed US jobs report is due later in the day. Economists polled by Reuters expect job additions to slow to 170,000 in September, and a slight dip in unemployment rate.
Indian rupee flat as local US dollar demand counters softer greenback
Average hourly wages are projected to rise 4.3% year-on-year.
The data comes amid low probability that the US Federal Reserve will hike rates at its November meeting.
The RBI’s policy decision is due around 10.00 a.m. IST, and the central bank is expected to keep rates on hold, according to all but one of the 71 economists polled by Reuters.
“Today’s RBI policy… will not cause too many flutters and is not a major factor for the rupee,” Srinivas Puni, managing director at QuantArt Market Solutions.
“For the rupee, US yields continues to be the primary factor for the next few week.” The 10-year US yield was little changed in Asia hours, at 4.71%.
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