NEW DELHI (Reuters) – India’s central bank likely sold $700 million dollars to prop up the rupee on Thursday as it plunged to a record low, according to three traders, amid broad based selling in Asian currency markets.
The rupee fell as much as 0.5% to 77.63 to the dollar, its second record low in less than a week.
The Reserve Bank of India (RBI) intervened both in the spot and the futures market when the rupee hit 77.55-77.60, the traders, who did not want to be identified, told Reuters.
On Wednesday, Reuters reported RBI intervened in the market through the week and the official said it will do so again if volatility persists without targeting any particular level.
The official said that it does not like “jerky” movements of over 0.50 Indian rupees against the dollar in one day.
Traders said RBI has sold $2 billion to $3 billion worth of dollars since the start of the week to defend the rupee.
RBI did not immediately reply to a message seeking comment.
The RBI has foreign-currency reserves of about $597.7 billion, which it sees as a formidable stockpile to defend the rupees.
“RBI is showing intent in reducing rupee volatility,” one of the trader said.
The rupee pared some of its early losses after the RBI’s intervention to trade at 77.46 against the dollar.
The currency has been under pressure due to concerns over rising inflation, traders said.
India’s March retail inflation rose to a 17-month high of 6.95% and April data is expected later in the day.