By Siddhi Nayak
MUMBAI (Reuters) – The Indian rupee ended little changed on Thursday, caught between weakness in Asian currencies due to U.S. tariff-related uncertainties, and prompt, aggressive intervention by the central bank.
The rupee ended at 87.20 against 87.21 in the previous session.
The unit hit a more than two-week low of 87.4050 earlier in the session, but strengthened to 87.1350 on aggressive intervention by the Reserve Bank of India (RBI).
Traders said the intervention was not just to stabilise the currency, but to also curb large one-way moves, thus reducing any speculative trades against the rupee.
“Prevailing global challenges outweigh the existing advantages for the rupee and the downside bias remains for the rupee,” said Amit Pabari, managing director of forex advisory CR Forex.
“We think a floor of 87.60 looks intact for the domestic unit, but the pace of depreciation will solely be determined by the RBI,” he said.
Asian currencies struggled on the day with the offshore Chinese yuan slipping to 7.2787 to the U.S. dollar.
Other Asian currencies also declined amid uncertainty on what U.S. President Donald Trump will do on tariffs.
Trump on Wednesday rekindled hopes for yet another one-month pause on new tariffs on imports from Mexico and Canada, saying they could take effect on April 2.
Trump’s tariff threat “remains real” but the forex markets will only believe tariffs when they see them, ING Bank said in a note.
Apart from news related to Trump’s tariffs, investors will be looking at crucial data sets that will be released this week.
The U.S. will report initial jobless claims, pending home sales, and provisional third-quarter growth data on Thursday and core PCE price index on Friday. The data sets will provide clues on the Federal Reserve’s rate cut cycle.
India will release the October-December growth figures on Friday.
(Reporting by Siddhi Nayak; Editing by Mrigank Dhaniwala)
