The rupee closed at 96.20, up 0.6% from its close at 96.82 in the previous session, its best one-day gain in two weeks.
The Reserve Bank of India deployed a familiar intervention strategy on Thursday, conducting heavy dollar sales via state-run banks before market open to halt a persistent slide in the rupee after a string of all-time lows in recent sessions, traders said.
The currency fleetingly climbed above the 96 per dollar mark before shedding intervention-led gains. Traders said that intermittent dollar sales from state-run banks persisted through the session.
The intent of intervention was visibly more aggressive than recent sessions, signalling discomfort with the one-way rupee moves from 94.50 on May 8 to a record low of 96.96 hit on Wednesday, a trader with a private sector bank said.
India is considering all available options to stabilise the rupee, including an interest rate hike, Bloomberg News reported on Thursday, citing people familiar with the matter.
Asian currencies were down between 0.1% to 0.4% as Brent crude oil futures hovered north of $100 per barrel, with investors awaiting developments in U.S.-Iran negotiations to end the war, which has lifted global oil prices by over 50%. U.S. President Donald Trump has suggested he could wait a few days for “the right answers” from Tehran but was also willing to resume attacks on the country.
“The dollar’s contained reaction to Trump’s comments leaves a relatively larger scope for further downside if a deal is indeed about to be agreed,” analysts at ING said in a note.
“But it also confirms thinner market patience, and a new period of a stall in negotiations could end up taking (the dollar index) above the 99.50 mark.” The dollar index was last at 99.1.
