The Indian rupee remained steady on Friday, with traders expecting the central bank’s interventions to prevent sharp declines. The rupee was trading at 83.4850 against the US dollar, almost unchanged from the previous close of 83.5025.
Dollar demand from local oil companies and cautious sentiment in the Indian equities market due to concerns over the upcoming election results have kept the rupee in check. Foreign exchange traders believe that the Reserve Bank of India (RBI) will step in to support the currency if it approaches the 83.50 mark.
The upcoming general election results, scheduled for June 4, have made the equity market nervous, leading to foreign investors pulling out around $2 billion from Indian equities in May. Despite this, the benchmark indices, BSE Sensex and Nifty 50, showed some recovery on Friday after a significant fall in the previous session.
MUFG Bank noted that the outcome of the election could impact the rupee and risk assets, with a positive result likely to boost market sentiment. The dollar index was stable, while US bond yields dipped as expectations of a rate cut by the Federal Reserve in September increased.
Overall, traders are closely monitoring the election results and global market trends to gauge the impact on the Indian rupee and financial markets.