Rupee hits record low amid negative global cues, RBI may intervene

Rupee at record low: The rupee has slumped to its all-time low of 83.9850 against the US dollar, nearing the crucial mark of 84 as the demand for dollars spiked from importers. After hitting a low a day before on September 4, Asia’s one of the most stable currencies has itched past its record low of 83.98.  

Talking to Reuters, a forex trader with a private bank said, "It is quite clear that the RBI is defending the rupee. If it allows the rupee to go below 84, dollar bulls will be active and a move towards 84.25 will be quick."

Over the month of August, the Reserve Bank of India intervened multiple times on both sides of the currency market to support the Rupee which led the currency to move in a narrow range of 20 paisa over the entire month. 

Reuters also noted that the higher dollar demand from importers to meet future payments is building pressure on the rupee. With RBI closely watching and regulating the move of rupee, the Indian currency has been the least volatile among its emerging market peers. 

The rupee "has not caught any relief" from the "helpful Asia cues" and again needs the help of RBI, a currency trader at a mid-sized private sector bank todl Reuters.

On the other hand, other Asian currencies inched higher on September 5 as expectations continue to pile up for a substantial rate cut from US Federal Reserve on September 18. 

According to a Reuters poll, the currently is likely to remain in a narrow range over a span of the next few years when compared to its US counterpart.