MUMBAI: The Indian rupee gained slightly on Thursday, tracking strength in its broader Asian peers after remarks from Federal Reserve Chair Jerome Powell helped cement bets of an interest rate cut in September.

The rupee was at 83.70 against the US dollar as of 11:00 a.m. IST, compared to its previous close of 83.72.

The currency had declined to a record low of 83.7450 on Wednesday.

Asian currencies were mostly higher by 0.1% and 0.8% while the dollar index was at 104 after declining 0.4% on Wednesday.

The rupee lagged gains in its Asian peers as dollar bids from importers hurdled gains, traders said.

Local oil companies were also bidding for dollars and the broad bias continues to be that of mild depreciation, and so the rupee is unlikely to rise above 83.60 in the absence of large inflows, a foreign exchange trader at a state-run bank said.

Meanwhile, dollar-rupee forward premiums rose, with the 1-year implied up 3 basis points to a near six-month high of 1.88%, aided by the decline in US Treasury yields.

Indian rupee ends moderately higher

The Reserve Bank of India’s “significant buying and selling of dollars, have kept the USD/INR movements relatively compressed.

Unless the RBI reduces its intervention pace, this trend is likely to persist,“ said Amit Pabari, managing director at FX advisory firm CR Forex.

The Reserve Bank of India has intervened in recent sessions to prevent sharp deprecation of the rupee, while traders have also pointed to its absorption of dollar inflows limiting gains.

India’s foreign exchange reserves rose for a third straight week, hitting a lifetime high of $670.86 billion as of July 19.

Investors now await US jobless claims data due later in the day which will be followed by closely watched jobs report for July due on Friday.