UAE: Indian rupee trades in narrow range against dirham; odds of record low seen rising

US Federal Reserve officials once again signalled their preference for keeping interest rates high

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Published: Thu 19 Oct 2023, 9:57 AM

Last updated: Thu 19 Oct 2023, 9:58 AM

The Indian rupee was trading in a narrow range and appreciated 3 paise to 83.25 against the US dollar (22.68 against UAE dirham) in early trade on Thursday.

At the interbank foreign exchange, it opened at 83.26 against the dollar (22.69 against dirham) and then touched an early high of 83.25 (22.68), registering a gain of 3 paise over its previous close.


Analysts are expecting the South Asian currency to be under pressure after long-maturity US Treasury yields climbed to multi-year highs on expectations that rates will remain high for long.

[Editor's Note: For real-time forex rates, click the widget below or visit KT's dedicated Trading News page here.]


The Reserve Bank of India (RBI) has over the last several days intervened to prevent the rupee from falling to a lifetime low.

"Looking at how US yields keep marching higher and how oil prices are, you would have to at least consider the possibility that the RBI will relent," a forex trader at a Mumbai-based bank said.

"From what I have seen this week, odds of a new low (on rupee) are now higher."

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The 10-year US Treasury yield rose to 4.9550 per cent in Asia, the highest in 16 years. Federal Reserve officials once again signalled their preference for keeping interest rates high which alongside robust US economic momentum is prompting investors to pile out of Treasuries.

Reiterating a common talking point among policymakers, New York Fed president John Williams said the central bank needs a restrictive monetary policy for a while to cool inflation.

Futures traders have lowered bets on the Fed cutting rates late next year to less than two from a previous four, while extending a target rate projection of 5 per cent or more through to September 2024. .

"Resilient US economic data brought the high-for-longer rate outlook back into the limelight lately," Singapore-based Yeap Jun Rong, market strategist at IG Asia, said, referring to the better-than-expected U.S. retail sales data released on Tuesday.

(Reuters, PTI)



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