Rupee Ends Two-Day Loss as Central Bank Eases Brexit Concerns

Updated on
  • RBI says it will take steps to maintain orderly conditions
  • Governor Rajan’s impending exit, Brexit have weighed on rupee

The rupee closed little changed after two days of losses as the central bank said it would take measures to tackle volatility arising from the U.K.’s referendum on membership in the European Union.

The Reserve Bank of India announced it would take steps including liquidity support to ensure “orderly conditions” in the financial markets, while the National Stock Exchange Ltd. said it is geared to handle an increase in trading activity on Friday.

The rupee closed steady at 67.48 per dollar in Mumbai, prices from local banks compiled by Bloomberg show. The dollar weakened as traders took cues from betting odds that point to the U.K. voting to stay in the European Union, rather than opinion polls that show the referendum is too close to call.

“RBI’s statement has given a lot of confidence as it reflects that they are vigilant and recognize the needs of the market,” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial Services Ltd. in Mumbai. “There’s relief that Britain may have more people trending toward remain, which is strengthening other currencies.”

The currency weakened 0.6 percent this week as central bank Governor Raghuram Rajan’s impending departure added to the anxiety about Thursday’s so-called Brexit referendum. The rupee has been Asia’s worst performer this year.

The yield on bonds due January 2026 dropped two basis points to 7.48 percent in Mumbai, prices from the central bank’s trading system show.

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