Indian rupee expected to open lower as markets watch for central bank intervention
The rupee is set to open lower today amid broad risk aversion and a widening trade deficit. Markets expect the central bank to intervene near the 91 level.
The Indian 
IN rupee is set to open weaker as broad risk aversion and softer Asian currencies and shares increase expectations that the Reserve Bank of India may intervene to prevent a breach of the psychological 91-per-dollar level. This potential intervention, alongside intensified dollar demand from importers, oil companies and foreign investor selling, is expected to materially affect domestic foreign-exchange liquidity and trade-related flows.
IN rupee is set to open weaker as broad risk aversion and softer Asian currencies and shares increase expectations that the Reserve Bank of India may intervene to prevent a breach of the psychological 91-per-dollar level. This potential intervention, alongside intensified dollar demand from importers, oil companies and foreign investor selling, is expected to materially affect domestic foreign-exchange liquidity and trade-related flows.The pressure on the currency comes as India's merchandise trade deficit widened to $34.68 billion in January. Furthermore, foreign investors have resumed selling Indian equities, adding to the risk-averse mood. The rupee is currently trading near the 91 level, a point of focus following recent surprise RBI dollar sales, which have kept speculative accounts and those trading non-deliverable forwards (NDFs) on high alert for further official presence in the market.
