The Indian central bank likely stepped in to the foreign exchange market on Wednesday to support the rupee, three traders told Reuters, as maturing contracts in the non-deliverable forwards market exerted pressure on the currency. The rupee was at 95.27, up modestly on the day after hitting an intra-day low of 95.5625 in early trading. The Reserve Bank of India also likely paired its spot dollar sales with dollar-rupee buy/sell swaps for maturities over 1 year, the traders said. Both the spot dollar sales and swaps were being carried out by state-run lenders, likely on behalf of the RBI, one of the traders added.
RBI likely intervenes to support rupee, conducts swaps, traders say
The Indian central bank likely intervened in the foreign exchange market on Wednesday to bolster the rupee, as maturing non-deliverable forward contracts created downward pressure. The Reserve Bank of India also reportedly utilized dollar-rupee buy/sell swaps for longer maturities, with state-run banks executing these trades on its behalf.
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