Rupee off record low on likely central bank intervention, Iranian official’s comment

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian rupee recovered after slipping to a record low on Friday, on likely intervention by the central bank and comments by an Iranian official that there was no missile attack on the country.

The rupee was at 83.5175 to the US dollar at 11:15 a.m. IST, marginally up from 83.5375 on Thursday. The currency had dropped to 83.5750, a lifetime low, in early trading.

The Reserve Bank of India (RBI) likely intervened in the onshore over-the-counter market and in non-deliverable forwards to help out the rupee, traders said.

The RBI “just completely knocked out” any thoughts “of a big push” higher on USD/INR, a FX trader said.

“I suspect a number of traders have been caught on the wrong side due to RBI’s resolute defence (of the rupee) and the clarification from Iran.”

Israel launched an attack on Iranian soil on Friday, sources said, in the latest tit-for-tat exchange between the two arch foes, whose decades of shadow war has broken out into the open and threatened to drag the region deeper into conflict.

Iranian media reported explosions, but an Iranian official told Reuters those were caused by air defense systems.

The Natanz nuclear site, the centrepiece of Iran’s uranium enrichment program, is in Isfahan province.

U.S. equity futures and Asian shares were off the worst levels for the session and Brent crude, having climbed past $90.50 at one point, was last at $88.86 a barrel.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow