Rupee hits day’s low against US dollar, recovers on RBI support

Interventions by the Reserve Bank of India (RBI) on Friday ensured that the rupee did not weaken beyond its record low of 96.96, dealers said. The currency fell to an intraday low of 96.70 per dollar, before recovering to close at 96.562, little changed from its previous close of 96.565.

Interventions by the RBI were felt both in the spot and the non-deliverable forwards markets. State-run banks were spotted selling dollars just before the local market opened at 9 am, traders said. Some foreign investor inflows, dealers said, helped in the currency's late recovery.

High oil prices and heavy dollar demand added pressure on the currency, as oil companies and importers bought the greenback. Brent crude topped $100 a barrel for the first time in two months before retreating about 4% to $96, according to Reuters. "The appreciation in the currency came despite elevated geopolitical tensions, as the currency benefited from a slight fall in crude oil prices, and massive RBI intervention," said a trader from a public sector bank.