Fears over a rise in global protectionist measures, along with a strong US economy, dragged the Indian rupee to a fresh intra-day low of over 70 against the US dollar on Tuesday before recovering by a fraction at Rs 69.98.
Around 11 a.m., the rupee plunged to 70.08 — lowest-ever — against the greenback.
However, soon afterward, the Reserve Bank of India (RBI) is said to have intervened to curb the rupee’s fall.
The intervention aided the rupee to stabilise just a tad below 70 to a USD at 69.98 around 11.05 a.m.
“The fear of a rise in global protectionist measures along with a strong US economy pulled the Indian rupee lower to 70.08 during intra-day,” said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.
Banerjee predicted an immediate range from Rs 69 to Rs 71 per US dollar.
At 1.40 p.m. the rupee stood at 69.855 to a US dollar.
“Around 70-70.08 level, the RBI might have intervened to protect the rupee. We saw some exporters selling in the market. So, that too supported the rupee. But importers will jump into the market on every dip in the USD/INR given the turmoil in the global market,” Rushabh Maru, Research Analyst, Anand Rathi Shares and Stock Brokers said.
“A decline in the WPI also provided support to the rupee. Market will now focus on the trade balance data for further direction,” he said.