Country is showcasing its attractions at ATM
The rupee was trading in a narrow range against the US dollar in early trade on Wednesday amid a muted trend in domestic equities and strength of the American currency in the overseas market.
Forex traders said sustained foreign fund outflows also dented investor sentiments.
At the interbank foreign exchange, the domestic unit opened at 83.25 (Dh22.68) against the dollar and then touched an early high of 83.23, registering a gain of 4 paise over its previous close.
With most major central banks likely done with their policy tightening cycles, analysts said the dollar's dream run over the past couple of years may have come to an end, putting less pressure on the RBI to intervene in currency markets.
Last month, RBI Governor Shaktikanta Das defended the regular use of its $586 billion in foreign exchange reserves saying it was necessary to prevent excessive volatility. The central bank sold about $23 billion in the last four months.
A near 70% majority of strategists, 16 of 23, who answered an additional question said RBI intervention would decrease over the coming year. The rest said it would increase.
"With a reversal of capital flows next year, the RBI's intervention in the currency market should reduce," said Suman Chowdhury, chief economist at Acuite Ratings and Research.
"Once you have a little more clarity on the Fed rate trajectory, U.S. Treasury yields are likely to come down further. If oil prices also don't see any further escalation then we are expecting that the (rupee) rate will stabilise."
ALSO READ:
Country is showcasing its attractions at ATM
District cooling firm announces Dh425 million dividend
Abu Dhabi conglomerate’s net profit surges 87.6% to Dh8 billion in Q1 2024
The first quarter has been marked with record revenue of Dh14.2 billion
The battle against inflation remains a focal point, expert says
Move will significantly enhance NRIs convenience of making everyday payments
Terrapay ties up with Multipass on cross-border payments
Holiday homes are increasingly gaining traction, witnessing huge growth in occupancy rates as the demand surges