Rupee Weakens to 95.97 Against USD Amid Persistent Dollar Demand
The Indian rupee weakened slightly in early trade on Wednesday, falling to 95.97 against the US dollar due to persistent demand for dollars from state-run oil marketing companies and firm crude oil prices.
The Reserve Bank of India's intervention in the market has been significant, with dealers reporting large-scale sales by state-run banks in both spot and forward markets.
This has kept the USD/INR pair below 96.00 level. Additionally, foreign portfolio outflows of around $2.2 billion this month have also put pressure on the rupee.
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, notes that 'The Reserve Bank has been an active presence -- dealers report state-run bank dollar sales, and the USD 14.9 billion fall in reserves to USD 766 billion in the latest week is consistent with sizeable intervention.'