According to Reuters article published on December 28, 2022, the Indian rupee recovered from mild losses to close flat on Wednesday as exporters likely sold dollars, dealers said, in a low-volume session, while forward premiums fell for a third straight day.
The rupee ended largely unchanged at 82.8575 per dollar. It fell up to 82.9225 during the session, though moved in a narrow 10-paisa range.
The 82.80-82.90 has acted as a strong support zone for the currency over the past two weeks.
There were some monthly futures expiry-related outflows, but it was largely quiet in thin volume trade, said a trader.
The currency likely rebounded from the day's low on dollar sales by exporters, although the rupee trading near 83-levels made investors nervous, added a state-run bank dealer.
"Being the year-end, there may not be large speculative positions getting built. The real move in the rupee will likely be seen in the first week of January," said Mandar Pitale, head of treasury at SBM Bank (India).
Markets will try to gauge the type of portfolio inflows and foreign direct investments India will get ahead of the budget presentation on Feb. 1, Pitale added.
USD/INR forward premiums fell for a third day, with the 1-year implied yield down 8 basis points at 2.06%.
The drop, said traders, was due to receiving interest in far forwards and the lack of bids from the central bank.
However, premiums were still about 45 bps above the more-than-a-decade-low hit earlier in December.
Meanwhile, the dollar index was flat at 104.240 after China said on Monday it would scrap its COVID-19 quarantine rule for inbound travellers, even as COVID cases spike.
Most Asian currencies declined as investors were divided over China's policy shift.
