Indian central bank steps up rupee support, soaring NRI deposits bolster firepower

MUMBAI: The Reserve Bank of India has stepped up its support for the rupee in recent sessions, shielding the currency from a surge in oil prices and rising U.S. Treasury yields, with a flood of deposits from non-resident Indians bolstering the central bank’s firepower. The rupee has rallied past the 95-per-dollar mark to a two-month high, catching much of the market by surprise given the headwinds facing the currency. Brent crude has jumped 7% so far this week to $95.50 a barrel. The 10-year U.S. Treasury yield has climbed to its highest level in nearly three years, while the dollar index is approaching the 100 mark. The RBI has repeatedly stepped in with dollar sales, absorbing the impact of adverse external developments and pushing rupee higher. Bankers say the central bank has been increasingly active before the formal market opening over the last three sessions, followed by intervention through the trading day. India’s RBI FX forward book hits record $136.7 billion on surging overseas deposits Previously, the central bank largely stepped in to curb weakness in the rupee, and more recently it appears to be using its intervention to push the currency higher, the bankers said. “Th