MUMBAI: The Indian rupee lingered in a tight band before closing nearly flat on Friday as most of its Asian peers reversed early losses and mild dollar sales from foreign banks helped the currency hold above its all-time low.
The rupee closed at 83.94 against the US dollar, nearly unchanged from its close of 83.9475 in the previous session. The local unit was nearly flat week-on-week as well.
Benchmark equity indexes, the BSE Sensex and Nifty 50, closed higher by about 1.6% each after firm US economic data allayed fears of a slowdown in the world’s largest economy and spurred a global stock rally.
Dollar sales from foreign banks, likely on behalf of custodial clients, helped support the rupee, a foreign exchange trader at a private bank said.
“State-run banks’ offers (on USD/INR) start to appear every time it moves towards 83.97 so there is limited appetite to go long at these levels,” the trader added.
The Reserve Bank of India has routinely intervened via state-run banks to help the rupee hold above the 84-handle, a psychologically important support level for the currency, traders said.
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