MUMBAI: The Indian rupee reached a record low versus the dollar this week but managed to recoup a large part of its losses, thanks to likely intervention by the country’s central bank in both spot and forwards.

The rupee ended at 82.3500 per US dollar on Friday, compared with 82.3450 in the previous session and down less than 0.1% from 82.3200 in the prior week.

The local unit dropped to a record low of 82.6825 at the start of this week, prompting the Reserve Bank of India to step in. The RBI intervened heavily on Monday and Tuesday, traders said, and there was likely some sporadic intervention on the other days.

These interventions were not on spot basis, but on forward basis. The RBI sold dollars in spot and conducted buy/sell swaps to push the delivery of dollars to a future date. The RBI’s buy/sell swaps sent forward premiums plunging.

The 1-year USD/INR forward implied rate dropped to 2.56%, its lowest since 2011. Week-on-week, the yield is down 40 basis points. Most of the buy/sell swaps RBI did this week was in far forwards, according to traders.

Globally, the focus remained firmly on how high and how fast US interest rates are likely to go. The higher-than-expected US inflation data on Thursday makes it almost certain that the US central bank will raise rates by 75 bps again next month.