Rupee ends in the green on likely central bank support
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The Indian rupee strengthened marginally to 87.53 a dollar Friday on likely intervention from the Reserve Bank of India (RBI), capping off a rough and tumultuous week punctuated with unexpectedly punitive tariffs on US-bound shipments from the country.Traders said sustained portfolio outflows and a significantly higher baseline tariff than anticipated earlier led to substantial weakness in the currency during the past two trading days.The rupee had closed at a record low of 87.59/$1 on Thursday.Through the choppy trading session, the first in the calendar month, the rupee had strengthened to 87.21 per dollar on the back of RBI's dollar sales, traders said. But continuous dollar demand from oil companies, foreign portfolio outflows from Indian equities, and a stronger dollar index pressured the rupee to close at 87.53/$1."The fall has been corroborated with a rise in the dollar index, a fall in Asian currencies and a fall in equities. The rupee looks vulnerable to global forces after Donald Trump's tariff announcement. Today, the RBI seemed to be the only entity selling dollars in the market," a trader with a public sector bank said.The dollar index rose to 100 on Friday and has been consistently strengthening during the week. It was at 97.6 at the start of the week.Traders expect the rupee to be under pressure on Monday, with the currency expected to trade near record lows, as the RBI's $5 billion dollar-rupee buy-sell swap is expected to mature on August 4. "The range for Monday is 87.25/$1 to 88/$1 with the central bank's $5-billion sold position coming up for maturity on August 4," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
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