Rupee regains composure to end nearly flat against a surging dollarThe rupee closed flat again on Wednesday, with the losses in the domestic currency limited by the Reserve Bank of India’s intervention even as the dollar rose broadly against almost all major currencies on rising inflation and global recession risks.While the domestic currency opened weaker against a rampant dollar driven by increased flight-to-safety bets, it ended nearly where it started on Wednesday, reflecting a similar trading pattern in the previous session as the RBI sold dollars via state-run banks to stem any significant losses in the rupee.Bloomberg showed the rupee was last changing hands at 82.3112 per dollar compared to its previous close of 82.3225, with the currency trading in a narrow range of 82.1575 to 82.3700.But PTI reported that at the interbank foreign exchange, the domestic unit opened at 82.32 against the dollar, then lost further ground to 82.35, registering a loss of 14 paise over its previous close.”In line with the dollar index, the rupee marked another steady day. So far this week, the rupee has been trading in a narrow range and closing near 82.32,” Dilip Parmar, Research Analyst at HDFC Securities, told PTI.Mr Parmar said a rebound in the domestic equities and the central bank’s intervention ahead of the crucial retail inflation release supported the rupee on Wednesday’s trade. In the near-term, spot USD/INR is expected to trade in the range of 82.10 to 82.80, he added.Markets now await Indian retail inflation data due on Wednesday for cues on trade direction.”The rupee was stable for a second consecutive day as the RBI ensured it did not weaken beyond 82.36 today. It made a low of 82.16 before buying by Oil companies took the $ up to 82.36 levels,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.”Market is looking at today’s FOMC meeting minutes and tomorrow’s CPI from the US to gauge the next movement in currencies. We also await CPI and IIP data from India today evening. Meanwhile, he added that the rupee is expected to remain at 82 to 83 in the near term.Financial markets are uneasy due to concerns that supply chain disruptions caused by China’s new COVID-19 limitations, geopolitical unrest, and aggressive policy tightening by major central banks in their fight against rising inflation would result in a worldwide recession.On Tuesday, the International Monetary Fund warned of these risks and lowered its forecast for global growth, underlining those worries.This risk aversion strengthened the dollar and caused the yen to plummet beyond the point at which Japanese authorities had previously been forced to intervene.The US dollar index, which compares the greenback to a basket of six major currencies – including the yen, pound, and the euro, rose 0.16 per cent to 113.52 after hitting 113.54, its highest level since September 29.
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