Indian rupee logs sharpest daily decline on dollar demand

MUMBAI: The Indian rupee ended lower on Monday, its worst intraday fall in more than two weeks, pressured by month-end dollar demand from importers, while weakness in major Asian currencies also hurt the local unit.

The rupee closed at 83.47 against the US dollar, down 0.16% from its close at 83.34 in the previous session.

Asian currencies were mostly down between 0.1% and 0.3%. The dollar index slipped 0.3% to 105.6, after the Japanese yen recovered from a 34-year low hit earlier on Monday, with traders citing yen-buying intervention by Japanese authorities to support the currency.

“Strong dollar demand has been there since the morning,” but the yen’s move higher helped the rupee avert further weakness, an FX trader at a private bank said. Most Asian currencies trimmed losses following the yen’s recovery.

Early in the session, foreign banks’ dollar bids had also pressured the rupee, the trader added.

The rupee is likely to trade in the 83.25-83.75 range in the near term with the magnitude of debt and equity inflows being a key driver of currency, Mandar Pitale, head of treasury at SBM Bank India, said.