New Delhi, Sep 17
The rupee has emerged as one of the least volatile currencies worldwide, remaining “very stable against the US dollar” and the volatility index, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said.
According to Das, the central bank’s stated policy is to prevent excessive volatility of the rupee.
“Stable rupee fosters confidence among market participants, investors and the wider economy,” Das was quoted as saying in reports.
The RBI has actively engaged in the foreign exchange market to manage fluctuations in the rupee, primarily employing public sector banks (PSUs) as intermediaries to sell US dollars.
The Central Bank, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.
A latest note by global investment firm Jefferies said the rupee is now the most stable currency among major economies.
Market analysts said the dollar weakness has been a major factor in keeping the rupee relatively stable, with only minor declines against the dollar.
The focus is now on the upcoming US Fed Reserve policy meeting on September 16, where a 0.25 per cent rate cut and a dovish stance are widely anticipated, said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
The certainty of an interest rate cut by the Fed has increased after jobless claims rose to 230,000 compared to the expected 228,000, giving the Fed more room to ease rates.
On Tuesday, the rupee appreciated 2 paise to 83.84 against the US dollar in early trade.
According to market experts, the USD/INR pair is expected to remain volatile, with support seen between 83.80-83.70 and resistance at 84.05-84.15.
