Rupee Rises To Intra-day High Before Slipping On Dollar Demand
· Business · Economic Times
The Indian rupee closed marginally higher at 96.73 against the US dollar on Friday compared to 96.79 on Thursday. The currency climbed to an intra-day high of 96.51 earlier in the afternoon following heavy intervention by the Reserve Bank of India. The central bank sold dollars through large state-owned banks to support the unit, which has lost about 7% this year. Despite this intervention, underlying dollar demand persisted as companies covered their positions and bought dollars at lower levels. Reserve Bank of India Governor Sanjay Malhotra stated on Wednesday that the currency was undervalued in terms of the real effective exchange rate.
Why it matters
Persistent corporate demand for dollars limits the effectiveness of Reserve Bank of India interventions, keeping the rupee under pressure as one of the worst-performing Asian currencies this year.
Read the original report — Economic Times
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