India rupee weakens in line with Asian peers but RBI help caps fall

The Indian rupee fell on Tuesday as elevated US Treasury yields and broad strength in the greenback weighed on Asian currencies.

However, likely intervention by the Reserve Bank of India (RBI) helped the local unit stay away from lifetime lows.

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The rupee was at 22.67 against the UAE dirham as of 9.45am compared with a close of 22.62 in the previous session.

The RBI likely sold dollars in the non-deliverable forwards market, before the spot market opened, five traders said.

"They (RBI) are likely to keep supplying dollars to limit moves to 83.24-83.25 (to the US dollar) levels," a foreign exchange trader at a private bank said.

Dollar sales from foreign banks, related to custodial flows, could also support the rupee, traders said.

With the rupee hovering close to its record low levels over the last few weeks, the RBI has likely been intervening in non-deliverable forwards to stem the pressure on the local unit.

The US 10-year Treasury yield rose to 4.70 per cent, its highest level since October 2007, on Tuesday, amid expectation that US interest rates will stay higher for longer.

• Indian rupee continues to fall for second day in a row