Mumbai: The rupee was little changed on Thursday, 13 September, ahead of a US Federal Reserve meeting next week, and traders shied away from taking aggressive positions wary of likely central bank intervention.
Though the Fed is expected to lower rates next week to cushion the impact of the subprime crisis on the broader US economy, analysts are divided on the extent of the cut.
At 9:54am (0424 GMT), the partially convertible rupee was at 40.45/40.46 per dollar, barely changed from Wednesday’s close of 40.4475/4550.
“All eyes are on the Fed now,” said a local trader. “But the rupee’s rise from current levels may be very hard as the central bank may intervene aggressively.”
Data on Wednesday showed the Reserve Bank of India had bought $11.43 billion in intervention in July — when the rupee hit a nine-year high of 40.20 against the dollar. The central bank has bought $38.1 billion in intervention since end-2006.
India’s industrial output growth slowed sharply than expected in July, and analysts said the rupee’s 9% rise this year was taking a toll on exporters.