RBI likely sold dollars, received forwards to stem rupee’s drop: Traders

The Reserve Bank of India likely sold dollars via state-run banks on Tuesday and conducted buy/sell swaps to limit the rupee's losses, three traders told Reuters.

The rupee was last trading at 82.3850, down from 82.32 in the previous session after hitting a record low of 82.6825 on Monday. The rupee has traded in a narrow range of about 8 paisa so far in the session.

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In comparison, the Korean won is down 1.7 per cent and the offshore Chinese yuan had declined 0.5 per cent to the dollar.

The relative stability in the rupee is thanks to the RBI, traders said.

The USD/INR 1-year implied yield slipped to 2.89 per cent, against 2.96 per cent in the previous session. The RBI was conducting buy/sell swaps, likely to sterilize its intervention in the spot market, a trader at a private sector bank said.

“The RBI is probably running down its forward book further.”