Rupee Rebounds From Two-Year Low on Suspected RBI Intervention

  • State-run Indian lenders were selling dollars: traders
  • Central bank will look to protect 67 per dollar level: RBL

The rupee rebounded from its lowest level since September 2013 on speculation the Reserve Bank of India intervened to stem losses after the currency fell past 67 per dollar.

The rupee ended at 66.6875 a dollar in Mumbai, little changed from Thursday, according to prices from local banks compiled by Bloomberg. It dropped as much as 0.5 earlier to 67.0050, the level around which state-run banks sold the greenback, traders said. The currency has declined 5.5 percent in 2015, on course for a fifth straight annual drop.

Intraday Graph

“State-owned lenders sold dollars, probably on behalf of the central bank,” said Rohan Lasrado, Mumbai-based head of foreign-exchange trading at RBL Bank Ltd. “The RBI will look to protect the 67 level in the run up to the Federal Reserve meeting in mid-December.”

India’s central bank doesn’t comment on the day-to-day movement in the rupee, RBI spokeswoman Alpana Killawala wrote in an e-mailed response to questions.

The rupee was Asia’s worst performer in November as global funds pared holdings of Indian bonds and stocks on increasing odds that the Fed will raise U.S. interest rates at its Dec. 15-16 meeting. Fed Chair Janet Yellen signaled Thursday that the conditions necessary for a liftoff have been met.

The currency rose 0.1 percent from Nov. 27, halting a seven-week declining streak.

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