Rupee Edges Above 96 as RBI May Step In
The Indian rupee gained 14 paise against the US dollar in early trade on Friday, September 25, amid a positive trend in domestic equities. The rupee opened at 95.92 against the American currency and then touched 95.85, marking a gain of 14 paise from its previous closing level.
The rupee had weakened by 26 paise on Thursday to settle at 95.99 against the US dollar. Forecasts suggest that the Reserve Bank of India (RBI) may intervene to smooth out volatility in the currency market, with some analysts expecting a potential intervention to prevent the rupee from breaking through the psychological barrier of 96 per dollar.
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, noted that India's adjustment has been orderly, with reserves near $781 billion and a policy mix that has contained the pass-through of energy prices better than most importers. He also highlighted that markets price roughly a two-in-three chance of a Federal Reserve rate hike in October.