Rupee dips on weak Asian currencies, state-run banks' Dollar purchases

Rupee declines: Rupee experienced a decline on Monday, influenced by weakening of or Asian currencies and buying of Dollars by state-owned banks.

Closing at 82.9050 against US Dollar, Rupee slipped slightly from its previous session's close of 82.8775. Throughout Monday's tring, it fluctuated within range of 82.83 to 82.9150.

Rupee hindered by purchases

A trer from a private bank noted that while re were supportive inflows, Rupee's upward momentum was curbed by Dollar purchases me by state-owned banks. It remained uncertain wher se purchases were executed on behalf of importers or central bank.

Trers reported that Reserve Bank of India (RBI) has been actively buying Dollars in spot market, counteracting continuous foreign investments in India's debt and equity markets. This intervention by RBI has limited rupee's recent gains.

Jateen Trivedi, a vice president and research analyst at LKP Securities, anticipated that RBI's intervention would persist, contributing to Rupee's stability against Dollar. He forecasted Rupee to tre within range of 82.70 and 83.20 leing up to Federal Reserve's policy announcement.

Asian currency trends

Across Asia, most currencies saw declines ahe of major central bank announcements. Bank of Japan's policy decision was scheduled for Tuesday, with expectations that it might move away from its negative rates policy. Investors were also awaiting Federal Reserve's review on Wednesday to gauge any shifts in rate cut projections for year.

Fed's projection of 75 basis points of easing in 2024, me in December, would likely impact short-term movement of Dollar based on rate projections and or macroeconomic indicators, according to ING Bank's analysis. y anticipated possibility of a hawkish revision in Fed's outlook.

(With Reuters Inputs)