The rupee opened three paise lower on June 30, dragged down by weak Asian cues while cautious traders awaited clearer trajectory signals. Importers accumulated the greenback to take advantage of the discounted levels.
The currency was trading at 94.57 to a dollar after ending the previous session at 94.54.
It has recovered around 3.05 percent from its historic low of 96.96 in May, but has entered a tight consolidation phase, remaining bound within a narrow 50-paise trading band over recent sessions.
Traders said the Reserve Bank of India (RBI) likely intervened to buy dollars, creating an opportunity for exporters to hedge their positions.
As June draws to a close, month and quarter-end dollar demand has started showing up once again.
“The demand was mainly from oil marketing companies which supported the dollar…. While RBI has also been buying dollars at Rs 94.10 or Rs 94.20 levels to give exports better levels to hedge for the near term while importers are also getting a chance to hedge their imports in the near term,” analysts from Finrex Treasury Advisors said.
Oil prices continue to support the rupee, with Brent crude holding near levels seen before the Iran conflict in late February. While oil has pulled back to pre-war levels, the rupee remains weaker than levels around 91 seen before the conflict.
Brent crude slipped to around $72.50, with investors focused on the Iran–US talks in Doha.
The dollar index inched up to 101.26. Among Asian currencies, the Indonesian rupiah led losses, while the Japanese yen hovered near a 40-year low against the dollar.
Expectations of Federal Reserve rate hikes later this year have supported the dollar. The Fed’s latest meeting was viewed as hawkish by analysts, prompting a repricing of rate hike expectations.
(With agency inputs)