The Indian rupee closed at its weakest level on Monday, influenced by a drop in other Asian currencies. The Reserve Bank of India intervened to prevent further depreciation, keeping the rupee in a range between 83.95 and 83.97 against the dollar. Traders believe the RBI sold dollars to support the currency. The rupee traded within a narrow range throughout the session, with the central bank likely selling dollars to stabilise the exchange rate. The dollar index edged lower, while most Asian currencies experienced declines between 0.1 per cent and 0.8 per cent. Market participants are awaiting the release of US consumer inflation data on Wednesday, which is expected to influence expectations for future Federal Reserve rate cuts. Currently, the market is pricing in approximately 100 basis points of rate cuts for 2024. Dollar-rupee forward premiums declined, with the one-year implied yield dropping by two basis points to 2.02 per cent. Traders are adopting a cautious approach, waiting for a potential dip in forward premiums before initiating new positions. Attribution: Reuters
