By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee was unable to sustain an uptick at the open on Monday, pressured by dollar buying by state-run banks, likely on behalf of oil companies.
The rupee was quoted at 86.6900 to the U.S. dollar at 12:48 pm IST, barely changed from its close on Friday.
The Indian currency opened higher at 86.56 and had hit 86.51 on the interbank order system.
State-run banks bought dollars aggressively after the open and “have largely been there all through”, an FX and rates head at a bank said, adding that it is likely for their oil clients.
“I have been hearing that an oil company is scouting around for quotes (from banks), he said.
A currency trader at a bank reckoned “that there is a small possibility” that the state-run banks may be buying dollars for the Reserve Bank of India (RBI) to replenish their FX reserves.
The selloff in Indian stocks on Monday, on the back of a decline in U.S. equities, was also cited by traders a reason for the rupee being unable to hold on to its opening advance.
DOLLAR STRUGGLES
The dollar was down against its major peers and versus Asian currencies on the day on worries that U.S. tariffs may have a negative impact on the economy.
U.S. business activity nearly stalled in February amid mounting fears over tariffs on imports and cuts in federal spending, data released on Friday showed.
Separately, data revealed that U.S. consumer sentiment dropped more than expected to a 15-month low and inflation expectations rocketed.
(Reporting by Nimesh Vora; Editing by Sonia Cheema)
