MUMBAI, May 30 (Reuters) – The Indian rupee, having opened weak on Thursday on worries over the rise in U.S. Treasury yields, received help from dollar offers from public sector banks.
The rupee was at 83.4150 to the U.S. dollar at 10:40 a.m. IST, having opened at 83.42, and compared with 83.3450 in the previous session.
Public sector banks are on the offer on the dollar/rupee pair, a foreign exchange salesperson at a large bank said.
“Do not know for sure if the mild offers are for the RBI (Reserve Bank of India) or for their clients,” he said.
“If it is for the RBI, the intent is not to hammer it (dollar/rupee) down.”
Currency traders, accustomed to regular RBI intervention, expect the central bank to step in at specific levels. The RBI is widely expected to not allow the rupee to dip below the 83.50 handle.
Other Asian currencies were down much more with the Korean won slipping nearly 1% and the Indonesian rupiah and the Thai baht shedding 0.4%.
A further upward move in U.S. Treasury yields, attributed to concerns over the demand-supply mismatch, pressured Asian currencies and dented demand for risk assets.
The 10-year U.S. Treasury yield has climbed 16 basis points in two days following two weak auctions.
Thursday’s decline, if it holds up, will be the fourth day of losses for the rupee.
U.S. yields, anxiety over the outcome of Indian elections, importers deciding to take a safety-first approach and exit of short (dollar) positions were cited by a currency dealer at a bank as reasons for the rupee’s recent decline.
Sign up here.
Our Standards: The Thomson Reuters Trust Principles.
