Indian Rupee Slipped to Two-Week Low as Dollar Demand Stays Strong

Indian – (Special Correspondent/Web Desk) – The Indian rupee slipped to its weakest level in two weeks on Thursday. Strong demand for dollars and possible money leaving the country for overseas debt payments hurt the currency.

The rupee was last trading at 95.3675 per dollar. That is down 0.15% from its previous close of 95.22.

Traders said the Reserve Bank of India stepped in with light actions. This helped stop the rupee from falling further.

Earlier this month, the rupee had touched 94.32, its highest level in over a month. New rules from the regulator and large inflows linked to a big local IPO had helped it rise. But those gains have now started to fade.

A trader at a foreign bank said dollar buying remains “quite sticky” and is unlikely to ease soon. Companies from many sectors, such as electronics makers and jewellers, are buying more dollars.

The offshore market shows a similar picture. A trader at a hedge fund in Singapore said few people want to sell the dollar against the rupee. In his view, only central bank action pushes the pair lower.

This steady weak mood means the rupee leans heavily on frequent support from the central bank. It also seems cut off from global trends.

On Thursday, the US Federal Reserve left interest rates unchanged. That news lifted most Asian currencies, but the rupee did not gain.

Analysts at Emkay Global said that a stable spot rate created by intervention and rules does not always mean stronger trust in the currency. They added that a lasting recovery will depend on whether market players change their long-term views, and not just their trading and hedging plans.

Meanwhile, markets are now waiting for the European Central Bank’s decision later in the day. Most people expect it to keep its deposit rate steady. It may also hint that another rate rise could come as early as December.