By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee was unable to hold above 82 against the U.S. dollar on Tuesday on likely intervention by the central bank, traders said.
The rupee was at 82.0350 to the dollar by 11:02 a.m. IST compared with 82.04 in the previous session. The local currency reached 81.9750 in opening trades.
“They (public sector banks) took it (USD/INR pair) back to 82 after the lower open and then all the way to 82.07,” a forex trader said.
“It is difficult to see how anybody other than the Reserve Bank of India (RBI) can be doing this in the kind of market we are in.”
The central bank has been consistently buying dollars when rupee has strengthened above the 82 level, according to traders.
The RBI has been on “a (dollar) buying spree near 81.90” in the current month despite the dollar index dipping to 100, Anil Bhansali, head treasury at Finrex Treasury Advisors, said.
The dollar index, weighed by expectations of a Federal Reserve pause following next week’s hike, was down to 99.70.
While the Fed is expected to pause, expectations are that the European Central Bank and the Bank of England will deliver more rate hikes, boosting the euro and the U.K. pound.
The euro is at a 17-month high versus the dollar. The dollar index is hovering near a on-year low. U.S. retail sales and industrial output data are due Tuesday in the lead to the Fed’s meeting next week.
Rupee forward premiums inched up with the 1-year up two basis points at 1.73%.
(Reporting by Nimesh Vora; Editing by Nivedita Bhattacharjee)
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