Rupee nears 92/$, RBI helps cap fall
Traders said RBI intervention in the foreign exchange market helped cap losses beyond the psychologically important 92 mark.
However, the rupee’s weakness spilled over into the govt bond market, where RBI had undertaken measures to infuse liquidity to keep yields down.
However, dollar sales by RBI ended up draining some of the liquidity.
Expectations of further depreciation also weighed on the interest rate swap market, pushing short-term swap rates higher despite relatively benign domestic macro indicators.According to Jateen Trivedi of LKP Securities, rupee traded flat to weak as markets remained cautious ahead of the Union Budget on Feb 1.
He said elevated bullion prices increased the import bill, and continued FII selling in equities has added pressure.
