INDIA RUPEE Rupee rangebound as dollar sales by exporters help in risk-averse market

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The Indian rupee strengthened a bit on Thursday, as traders cited dollar sales by exporters, but strong gains were not expected amid the holiday lull and risk aversion in broader markets.

The rupee was at 82.78 per dollar by 10:05 a.m. IST, having firmed up to 82.75. The currency closed at 82.8575 on Wednesday.

Exporters holding their dollars are likely making sales as it is the end of the quarter, but due to the absence of a large number of market participants the moves would remain rangebound, said a foreign exchange trader.The rupee has stayed on the weaker side of 82.50 for the past two weeks with moves confined to small ranges per session. Analysts believe it is an attempt to bring stability to the currency after a sharp depreciation earlier this month.

Dollar offers by state-run banks around 82.85-82.90 levels over the period, which some traders reckon were on behalf of the Reserve Bank of India, have kept the rupee from weakening past 83 per dollar. It hit a record low of 83.29 in October. Meanwhile, gains on Thursday were also limited by the dollar index nudging higher to 104.360 and weakness in broader Asian markets as currencies and equities mostly fell.

Markets are likely "digesting the fact that the initial stages of China re-opening will necessarily entail outbreaks in a thus-far cocooned population," Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note.overwhelmed, sparking concerns about the spread of the virus.

 

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