Rupee slips but averts record low as intervention blunts outflow pressure

The Indian rupee weakened slightly on Wednesday but held off pressure from dollar demand linked to maturing non-deliverable forwards and foreign portfolio outflows, as the central bank intervened to support the currency.

The rupee hovered near its record low of 93.98 per dollar through the ‌session before ⁠closing at ⁠93.9775, down 0.1%.

Indian stocks rose after Brent crude fell below $100 a barrel, but ​the rupee struggled to benefit as interbank traders and importers bought dollars.


A series of NDF maturities, including Wednesday's, is expected to keep the rupee under pressure over the next week, a trader at a private bank said.

Indian stocks rose with the Nifty ⁠50 up ‌about 2% as investors took cues from reports that ​the U.S. ​had proposed a month-long ceasefire and sent a 15-point ⁠plan to Iran.

Equities in Asia and Europe were ​higher as well while futures pointed to a strong ​start for stocks on Wall Street, signalling an improvement in risk appetite which had been otherwise battered by worries over the conflict.

Among currencies, the dollar index was a tad higher at 99.3 while Asian FX was mostly rangebound.

Mixed signals from Washington and Tehran ‌though have also injected caution in traders' minds.

Israel and Iran exchanged airstrikes on Wednesday, as Iran's military rejected President ​Donald Trump's ​assertion the U.S. was ⁠in negotiations to end the war, saying the U.S. is negotiating with itself.

"We are not geopolitical experts, but we would have thought Iran would ​have maximum leverage of high energy prices going into any negotiation. Thus, it is probably too early to expect any big drop in energy prices or a much softer dollar this week," analysts at ING said in a note.