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The Indian central bank likely sold US dollars to cap further deprecation in the rupee after the currency hit a fresh record low on Wednesday due to strong dollar demand from local importers and oil companies, four traders told Reuters.
The Indian rupee fell to a record low of 83.45 in the closing minutes of the session. It was at 83.37 against the dollar as of 03:28 p.m. IST, down by 0.1% compared with its close of 83.28 on Tuesday.
During the session, the rupee was also pressured by weakness in the offshore Chinese yuan and the Japanese yen. At least three state-run banks were seen offering dollars, likely on behalf of the Reserve Bank of India, near the end of the session, traders said.
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