The Indian rupee closed little changed on Wednesday, despite weakness in Asian peers, as the Reserve Bank of India likely sold dollars to prevent the rupee from falling to a fresh record low. Likely consistent dollar supply from India's central bank helped the rupee hold its ground, traders said. The RBI wasn't aggressively selling dollars but was seen offering the currency at 83.23-83.24 levels via state-run banks, a foreign exchange trader at a state-run bank said.
The Indian rupee weakened on Tuesday, tracking Asian peers, while elevated U.S. Treasury yields also weighed on the local unit, which neared key support levels. The 10-year U.S. Treasury yield rose to 4.56% in Asian hours, its highest level since October 2007. "Looking at the dollar index, the rupee would have gone beyond 83.30," a foreign exchange trader at a state-run bank said.
The Indian rupee ended weaker on Monday despite a rally in the Chinese yuan and a softer U.S. dollar as the domestic unit's strength was capped by dollar demand from oil companies and importers, traders said. The onshore Chinese yuan rallied by about 0.7% to 7.31 against the U.S. dollar, while the Thai baht led gains among other Asian currencies. Although the yuan received a boost from a stronger yen, it rallied even further after China's foreign exchange self-regulatory body said it would resolutely fend off risks of the yuan weakening too much.