The Indian rupee declined against the U.S. currency on Tuesday, fuelled by the dollar's surge versus its major peers and importer hedging, though the Reserve bank of India's likely intervention kept the drop short of the 83-per-dollar mark.
The local currency on the interbank order matching system fell to 82.9950, prompting state-run banks to sell dollars, likely on behalf of the RBI, three traders told Reuters.
" RBI is not allowing it to move higher and therefore it is unable to cross 83.00 for the present," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.The rupee which was anyway under pressure on account of importer hedging was further hurt by the dollar's surge against its major peers. The dollar index rose almost 1%.
The dollar's jump came despite the relatively upbeat risk appetite and the fall in Treasury yields. European shares climbed 1.5% and U.S. equity futures were up about 1%.
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