Mumbai: The Indian rupee closed at 86.55 to the US dollar, weaker by 19 paise from its previous close of 86.36 as dollar demand from foreign banks continued, outweighing softer US yields and the dollar index. Likely intervention from the Reserve Bank of India helped contain excess losses.
"Most foreign banks were buying dollars, while the RBI sold dollars to cap depreciation near 86.50/$1 levels, after which some more depreciation was seen up to 86.55/$1," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Bank of America expects the rupee to weaken to 88/$1 by June 2025, while Barclays expects a level of 89.50/$1 by the end of this calendar year, reports said.
The dollar index stood at 109.1 levels after signs of cooling inflation in the US, reinforcing market expectations of further rate cuts by the US Fed during the year.
Inflation in the US rose for the third consecutive month to 2.9% in December 2024 from 2.7% in November, in line with market expectations. This data also prompted a decline in 10-year US Treasury yields, which fell 14 bps to 4.65%.
Source Name : Econoimic Times