MUMBAI: The Indian rupee closed little changed on Thursday, tracking muted price action in most of its Asian peers and as dollar demand from custodian banks eroded the local unit’s early gains.
The rupee ended at 83.5075 against the US dollar, barely changed from its previous close at 83.5175. The currency had risen to a high of 83.4475 early in the session, before shedding some of the gains.
The dollar index rose 0.2% to 105.7, while most Asian currencies were muted save for the Korean won which weakened 0.4%.
While mild inflows helped the rupee rise early in the session, dollar demand from importers and two large foreign banks, most likely on behalf of custodial clients, curbed the rise, a foreign exchange salesperson at a private bank said.
The rupee’s moves on either side have been constrained this week as local dollar demand remains strong while mild offers from state-run banks, likely on behalf of the Reserve Bank of India, have limited weakness, traders said.
The rupee’s one-month realised volatility has declined to about 2% after rising to a near six-month high of 2.79% on April 19 when the rupee had declined to its all-time low of 83.5750.
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