By Jaspreet Kalra
MUMBAI (Reuters) -The Indian rupee was little changed on Tuesday, with persistent dollar demand from importers and two-way portfolio flows keeping the unit in a narrow range, while weak global risk appetite hit other Asian currencies.
The rupee was at 88.65 against the U.S. dollar as of 9:50 a.m. IST, down slightly from its close at 88.63 in the previous session.
The South Asian currency has largely hovered between 88.50 and 88.80 over the last two weeks, as frequent dollar-selling interventions by the Reserve Bank of India offered support in the face of negatively skewed portfolio and merchant flows.
India’s benchmark equity indexes, the BSE Sensex and Nifty 50 were down about 0.3% each but fared better than the 2% drop in Asian shares outside Japan.
Foreign investors have net sold $1.2 billion of local stocks so far in November, taking the year-to-date outflow tally to $17.2 billion.
On Tuesday as well, traders pointed to portfolio outflows related to an equity block deal, which could trouble the rupee, but at the same time, foreign banks were spotted offering dollars in early trading.
“We still think dips in USD/INR will be shallow even as RBI remains protecting on the topside at 88.80 levels,” MUFG said in a note. Data on Monday showed that India’s merchandise trade deficit widened to a record high of $41.68 billion in October, due to a jump in gold imports and a fall in exports to the U.S.
Elsewhere, the dollar index was steady at 99.5, while Asian currencies were down between 0.1% and 0.6% as investors awaited the release of key U.S. economic data this week, with the closely watched September nonfarm payrolls report due on Thursday.
Traders are looking to the U.S. data for clues on the health of the world’s largest economy.
(Reporting by Jaspreet Kalra; Editing by Eileen Soreng)
