MUMBAI, Aug 31 Reuters The Indian rupee declined in August as rising U.S. Treasury yields boosted demand for the dollar, but the local unit performed better than its Asian peers on likely intervention by the Reserve Bank of India.

The rupee ended weaker at 82.7850 per dollar on Thursday, versus its previous close of 82.7325. For the month, the currency recorded a decline of 0.66.

The rupee and other Asian currencies were pressured by the rise in U.S. Treasury yields that in turn lifted the dollar against its major peers.

Resilient U.S. data prompted investors to bet that the U.S. Federal Reserve will hold rates higher for longer, pushing up yields.

The 10year U.S. yield reached a multiyear high of 4.36 earlier this month. The twoyear yield rose to 5.10, just a few basis points shy of the highs reached in the current Fed hiking cycle. The dollar index was up around 1.6 in August, halting a twomonth losing run.

The Reserve Bank of India made sure the rupee did not fall below the record low of 83.29 hit in October 2022.

The RBI sold dollars in the onshore overthecounter market and intervened in the nondeliverable forwards. read more

Further, the RBI in its bid to aid the rupee, told some banks to stop taking fresh NDF arbitrage positions. read more

The central bank39;s measures helped the rupee recover from the month39;s low of 83.16.

The rupee earlier had gone through our endyear forecast of 83.0, Capital Economics said in a note earlier this month.

But it is…

Leave A Comment