Rupee holds above record low, supported by state-run banks' dollar sales
By Jaspreet Kalra
MUMBAI, Aug 28 (Reuters) -The Indian rupee weakened slightly on Wednesday, tracking a dip in most Asian currencies, but managed to hold above its all-time low, supported by mild dollar sales from state-run banks.
The rupee INR=IN closed at 83.9525against the U.S. dollar, a tad lower than its close at 83.9250 in the previous session.
While the currency touched an intraday low of 83.9675, it managed to hold above its all-time low, underpinned by "intermittent offers (on USD/INR)" by state-run banks, a senior trader at a foreign bank said.
Routine interventions by the Reserve Bank of India (RBI) this month have ensured that the rupee does not fall to 84, a psychological support level for the currency, traders said.
Wedged between strong dollar demand from importers and tepid portfolio flows, on one hand, and the RBI's interventions on the other, the rupee has hovered between 83.65 and its record low of 83.9725 so far in August.
Overseas investors have sold $1.3 billion of local stocks on a net basis this month, compared with nearly $7 billion of inflows over the previous two months.
"The rupee has followed a consistent pattern in recent sessions - opening strong only to lose ground as dollar buying picks up," Amit Pabari, managing director at FX advisory firm CR Forex, said.
The dollar index was up 0.2% at 100.8 on Wednesday, while most Asian currencies slipped, led by the Korean won, which declined 0.3%.
Traders expect the rupee to find mild relief later this week, supported by up to $3 billion of inflows related to changes in the MSCI index, which tracks emerging markets equities.
U.S. personal consumption expenditure (PCE) inflation data on Friday is a closely watched global cue this week as it may help investors gauge whether the Federal Reserve is likely to deliver a 25 or 50 basis point rate cut at its September meeting.
Reporting by Jaspreet Kalra
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