By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee was nearly unchanged on Tuesday as likely intervention by the Reserve Bank of India supported the currency amid pressure from the rise in U.S. bond yields, which prompted declines in most Asian currencies.
The rupee was nearly unchanged at 84.0675 against the U.S. dollar as of 10:30 a.m. IST, compared with its close at 84.0725 in the previous session.
The currency had touched its all-time low of 84.0775 last week.
Foreign banks and local oil companies were spotted bidding for dollars, while state-run banks, likely on behalf of the RBI, were present on offer, traders said.
The RBI has routinely intervened via state-run banks to support the currency amid sustained pressure due to the dollar’s strength and the outflows of foreign funds from local stocks.
Overseas investors have pulled out nearly $10 billion, on a net basis, from local stocks over October so far, on track for a record monthly outflow.
Benchmark Indian equity indices, the BSE Sensex and Nifty 50 were down about 0.2% each on the day.
Meanwhile, the dollar index is up over 3% this month boosted by rising odds of a victory for Donald Trump in the upcoming U.S. presidential election. The 10-year U.S. Treasury yield has risen 38 basis points this month and was last quoted at 4.18%.
“U.S. election risks are dominating markets amid a resurgent Trump … this is propelling U.S. yields higher and lifting the USD,” DBS Bank said in a note.
Asian currencies were mostly weaker on the day with the Malaysian ringgit and Indonesian rupiah down 0.4% each and leading losses.
(Reporting by Jaspreet Kalra; Editing by Savio D’Souza)
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