The Reserve Bank of India (RBI) has been intermittently selling U.S. dollars in the non-deliverable forwards, spot, and near-forwards markets to ensure the rupee does not breach the lifetime low of 83.29 hit in October 2022.
Selloff in bonds across the world hurt risk appetite. The U.S. 30-year Treasury yield spiked to 5% for the first time since 2007 and Germany s 10-year bond rate rose to 3%.
The rupee opened at 83.21. It was poised to start even lower, tracking non-deliverable forwards, but that was averted by likely U.S. dollar sales by the Reserve Bank of India.
Analysts said higher interest rates and US bond yields are prompting foreign investors to stay in the selling mode in Indian capital markets, while the rupee witnessed some recovery due to a significant decline in India s current account deficit (CAD).
The U.S. Federal Reserve may need to raise rates further given the resilience of the economy, Minneapolis Federal Reserve Bank President Neel Kashkari said on Monday.