MUMBAI: The rupee was Asia’s top-performing currency on Tuesday, as under-hedged exporters rushed to cover their exposure and foreign banks sold dollars for custodial clients.
The rupee was trading at 78.63 as of 0646 GMT, compared with the previous close of 79.02. Earlier in the session, the unit had climbed to 78.50, its highest level since June 27.
“The way USDINR is sliding today after breaking the 79 level, it clearly shows that it is fear-of-missing-out at play amongst exporters,” said Vikas Bajaj, head of currency derivatives segment at Kotak Securities.
“They are rushing in to cover their un-hedged exposures.”
The Indian rupee‘s regional peers were mostly range-bound. The onshore Chinese yuan was up less than 0.1%, while the Korean won and the Indonesian rupiah were slightly lower.
“The move (on rupee) is not surprising to us, but what is surprising is the speed and absence of the RBI (Reserve Bank of India) on the bid side,” Bajaj said.
Dollar offers by two foreign banks, likely related to portfolio inflows, further boosted the rupee, a dealer at a private bank said.
Replying to supplementaries, she said interventions that are happening from the RBI side are more for containing volatility that is happening between the Indian rupee and the US dollar and so on.