Indian rupee logs best week in five as RBI muscle power, foreign deposits support

MUMBAI: The Indian rupee ended largely unchanged Friday, but posted its best weekly performance against the U.S. dollar in five weeks, helped by stronger-than-expected dollar inflows into the central bank’s special schemes. The Indian rupee moved in a narrow six paisa range before ending at 94.4850, aided by the Reserve Bank of India, which intervened at the start of the session and continued to sell dollars thereafter, traders said. For the week, however, the currency gained 0.9%, posting its biggest rise against the dollar since the week ended July 31, aided by heavy RBI intervention. The rupee was also supported by an influx of dollars that far exceeded estimates. The RBI repeatedly sold dollars near the open through the week. The central bank’s increasingly forceful intervention comes as its special schemes drew more than $136 billion in June-August. Its stepped-up presence has reinforced expectations that the RBI is using its increased firepower to steer the rupee higher. “Overall, the FCNR (Foreign Currency Non-Resident) story has given the rupee a strong shot in the arm, but the underlying fundamentals still carry their share of risk, and 94.00–94.20 remains a strong support