NEW DELHI (Reuters): The Indian rupee (INR) logged its biggest one-day advance in three weeks against the dollar on Friday, helped by likely central bank intervention in the spot and non-deliverable forward markets, which traders described as aggressive.
The rupee ended at 83.1225 to the U.S. dollar, compared with a close of 83.2450 in the previous session, to log its best one-day gain since Sept. 29.
For the week, the rupee rose 0.2% and recorded its biggest weekly advance in two months.
“The (Reserve Bank of India’s) intervention has been quite aggressive,” said Arnob Biswas, head of foreign exchange research at SMC Global Securities.
“Any uptick on the rupee is likely to be short-lived with importers stepping in.”
The RBI likely intervened in the NDF and spot markets, resulting in relief for the rupee, traders said.
The central bank has intervened multiple times this week to prevent the rupee from hitting its record low of 83.29, traders have said.
Indian Rupee traders were also eyeing the USD/INR overnight cash rate and forward premiums on concerns that a $5 billion dollar/rupee swap could lead to a dollar shortage when it matures on Monday.
The 10-year U.S. Treasury yield was at 4.94% after hitting 5% late in the U.S. session, the highest since 2007.
Federal Reserve Chair Powell said on Thursday that the rise in yields was due to a robust economy, term premiums and quantitative tightening.
Oil prices were up for a fourth straight day, with Brent crude climbing to near-$93.30 per barrel. Brent is up nearly 10% since the breakout of the Middle East conflict.
