Indian central bank likely sold dollars heavily before local spot market open, traders say

MUMBAI: The Indian central bank intervened heavily before the opening of the local spot market on Tuesday, looking to support the rupee amid high demand for the dollar related to the maturity of positions in the non-deliverable forwards market, four traders told Reuters.

The rupee was last quoted at 86.5150 per US dollar as of 09:35 a.m. IST, up nearly 0.1% on the day.

The currency had weakened to its all-time low of 86.5825 on Monday.

A large state-run bank sold dollars aggressively, most likely on behalf of the Reserve Bank of India, in the last few minutes leading up to the opening of the local spot market, a trader at bank said.

Strong dollar bids related to the maturity of positions in the NDF market is likely to keep sizeable gains at bay for the rupee on Tuesday, a trader at a bank said.

Indian central bank likely selling dollars to support rupee, traders say

The dollar-rupee daily fix was last quoted at a 1 paisa premiums, per traders, signalling strong demand to buy dollars at the daily reference rate published by the RBI.

The dollar index was up 0.1% at 109.6 while Asian currencies were mostly stronger.