Market News
Rupee outshines peers on RBI support, importers pile in - REUTERS
MUMBAI, Oct 27(Reuters) - The Indian rupee has outperformed its regional peers in October, aided by the central bank's consistent market interventions that have helped the South Asian currency find its footing after being hit by a barrage of negative cues.
The local unit has climbed nearly 1% so far this month. It was slightly weaker at 87.9850 per U.S. dollar on Monday.
The Reserve Bank of India's heavy-handed intervention lifted the rupee from the brink of an all-time low earlier this month, and traders say the central bank now appears to be defending the currency around the 88-handle.
Importers, meanwhile, have piled in to take advantage of the turnaround, with an analysis by Barclays indicating that importer dollar-buying remained firm in October after picking up last month with strong buying in near-tenor forwards.
The RBI's "USD-selling intervention has given importers better levels to buy USDs, which also suggests limits to USD/INR downside," the firm said in a note.
In addition to giving the currency some breathing room, the interventions have helped the rupee fare better than its peers as the dollar gathered some steam this month, largely on the back of weakness in the euro and the Japanese yen, which were bogged down by political developments.
The dollar is up over 1% this month against a basket of major peers, while currencies like the Korean won and Philippine peso have declined by 2% and 0.7%, respectively.
Elsewhere, an improvement in foreign portfolio flows has also helped the rupee, with overseas investors lapping up about $2.7 billion worth of Indian stocks and bonds so far in October.
On Monday, the benchmark stock index Nifty 50 (.NSEI) rose 0.7%, while the yield on the 10-year benchmark bond edged up to 6.5461%.
