Indian central bank likely selling dollars to support rupee, traders say

MUMBAI: The Indian central bank was likely selling dollars to support the rupee on Monday, after the currency slumped to its all-time low as the dollar surged on expectations that the Federal Reserve will not cut rates by much this year, four traders told Reuters.

The rupee was at 86.36 per US dollar as of 10:15 a.m. IST after hitting its all-time low of 86.39 earlier in the day.

State-run banks were spotted offering dollars, most likely on behalf of the Reserve Bank of India, traders said.

Indian rupee to stay under pressure, all eyes on central bank’s defence of 85.80

The RBI seems to be “letting it (USD/INR) move up till bids thin out a little and then stepping in to cap the rise,” a senior trader at a bank said.

The dollar index was up 0.2% at 109.9 while most Asian currencies weakened.

The dollar was boosted by robust US jobs data, leading to expectations that the Federal Reserve will proceed cautiously with rate cuts this year.