By Jaspreet Kalra<\/p>\n
MUMBAI, Mar 6 (Reuters) – The Indian rupee was set to extend its weekly decline on Friday, as a widening conflict in the \u200cMiddle East kept markets jittery, while state-run banks’ presence in the local \u200cFX market this week steadied the currency and cooled forward premiums.<\/p>\n
Traders said state-run banks, likely on behalf \u200bof the Reserve Bank of India, were spotted both selling spot dollars and conducting buy\/sell dollar-rupee swaps over recent sessions.<\/p>\n
On Friday, the rupee was at 91.65 per dollar, compared with the previous session’s close of 91.60.<\/p>\n
While the rupee had hit a record low of \u200c92.3025 on Wednesday, it was \u2060supported by aggressive central bank intervention on Thursday, four traders said. The intervention came alongside dollar-rupee buy\/sell swaps by state-run lenders.<\/p>\n
As a \u2060result, the 1-year dollar-rupee implied yield eased from an over one-month high of 2.87% to around 2.70%.<\/p>\n
“There was constant receiving interest from state-run banks,” a trader at a large \u200bprivate bank \u200bsaid. The swaps were likely intended to \u200bmitigate the rupee liquidity impact of \u200cspot dollar sales, the trader added.<\/p>\n
A tightening of liquidity can pressure local bonds, which have been bogged down by concerns of over-elevated fiscal supply and the threat from higher oil prices. Bankers have also pointed to data indicating that the RBI has been stepping up support for government bonds.<\/p>\n
Elsewhere, Asian stocks were headed for their sharpest \u200cweekly drop in six years with investors seeking \u200bthe safety of cash amid lingering worries that \u200bthe U.S.-Israel war on Iran could \u200bdrag on for weeks.<\/p>\n
India’s benchmark equity indexes, the BSE Sensex and \u200cNifty 50 were down about 0.7% \u200beach on the day.<\/p>\n
“With \u200buncertainty around how the U.S. may react to Iran\u2019s Supreme Leader pick, coupled with possible further escalation by all parties pulling in regional players in the \u200bGulf further into the \u200cconflict, we expect markets to remain extremely cautious heading into the weekend \u200bon possible gap risks,” MUFG said in a note.<\/p>\n
(Reporting by Jaspreet Kalra; \u200bEditing by Mrigank Dhaniwala and Harikrishnan Nair)<\/p>\n","protected":false},"excerpt":{"rendered":"By Jaspreet Kalra MUMBAI, Mar 6 (Reuters) – The Indian rupee was set to extend its weekly decline…\n","protected":false},"author":2,"featured_media":326062,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,7529,46,21274,161300,123016],"class_list":["post-326061","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-il","tag-indian-rupee","tag-israel","tag-reserve-bank-of-india","tag-state-run-banks","tag-swaps"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/326061","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=326061"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/326061\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/326062"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=326061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=326061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=326061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}