RBI backstop keeps Indian rupee stable, blunting importer dollar demand impact

MUMBAI: The Indian rupee ended little changed on Wednesday after moving in a narrow range, as continued support from the Reserve Bank of India offset rising dollar demand from importers and the impact of a spike in oil prices and Treasury yields. The Indian rupee opened at 94.89 against the U.S. dollar and briefly moved higher, before trading around the previous day’s close for most of the session. The currency ended at 94.97, after having settled at 94.95 on Tuesday. The RBI likely stepped in with dollar sales before the market opened and remained present to curb any major volatility in the currency, traders said. The central bank has stepped up its support for the rupee in recent sessions, armed with a flood of deposits from non-residents that have helped it shield the local currency from a surge in oil prices and rising U.S. Treasury yields. “I think the FCNR scheme achieved its intended objective of supporting external funding environment and stabilizing the rupee,” said Krishna Bhimavarapu, APAC economist at State Street Investment Management. “The FCNR flows may have eventually exceeded $100 billion.” Renewed military escalation between the U.S. and Iran rattled markets, send