Rupee Recovers Sharply After Hitting Record Low

MUMBAI: The Indian Rupee on Thursday depressed to a record low before it recovered to end the session higher as the Reserve Bank of India likely sold dollars to support the sliding local unit.

The rupee closed at 82.76 per U.S. dollar, against 83.0200 in the previous session. It sank to a lifetime low of 83.2625 earlier in the session, prompting the RBI to step in.

The RBI intervened through advance dollar sales rather than spot transactions as the central bank was likely keeping the spot reserves in order to avoid having its involvement affect the rupee’s liquidity, according to analysts.

In the previous session, the domestic unit closed at its weakest level of 83.02 per dollar. The rupee came under pressure at the open after U.S. Treasury yields resumed their march higher. The new multi-year highs on yields, fuelled by the Federal Reserve’s rate hike outlook, weighed on demand for Asian currencies.

Meanwhile US Dollar for the first time since 1990, reached the symbolic threshold of 150 yen on Thursday, helped along by Treasury rates that were trading at multi-year highs and kept markets on high alert for intervention from Japanese authorities.

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