Indian Rupee Remains Steady Despite Positive Growth in Other Asian Economies

The Indian rupee remained almost unchanged against the dollar despite gains in Asian currencies. Most Asian currencies gained on the back of reports that the Chinese central bank may be wary of the yuan’s recent decline. However, the rupee ended at 82.0250 against the dollar, only slightly up from its previous day’s position at 82.04. Traders are expecting the current stalemate to continue, and and Anil Bhansali, head of treasury at Finrex Treasury Advisors, predicted that the existing range of the rupee could continue for some more time, with the RBI buying dollars. As the Chinese yuan recovered and hit 7.2248 to the U.S. dollar, it highlighted a signal that the central bank was concerned that there had been too quick a fall in the yuan. The yuan lifted other Asian currencies and pushed the dollar index lower. Investors are expected to keep an eye on US data releases this week to gauge how many more times the US Federal Reserve will raise rates. However, futures indicate that investors are not convinced that the US Fed will manage to follow through on its projections of two more rate hikes this year. The one-year implied yield in rupee forward premiums hit a one-month high of 1.87%, ending one basis point lower at 1.84%.