Market News

By Nimesh Vora

MUMBAI, August 7 (Reuters) - The Indian rupee was largely unchanged on Thursday, defying pressure from additional U.S. tariffs as expectations of central bank intervention supported the Asian currency, traders said.

The rupee was quoted at 87.7250 to the U.S. dollar as of 1:16 p.m. IST, compared with 87.7325 in the previous session. The currency has so far traded in a narrow 10 paisa range.

The local unit held firm despite U.S. President Donald Trump following through on a threat to impose an additional 25% tariff on Indian goods over continued purchases of Russian oil.

"The market is probably factoring in that the Reserve Bank of India will not allow an aggressive up move (on USD/INR),” a trader at a large private bank said.

"There is a reluctance to take it (USD/INR) higher, it would seem."

The RBI had intervened on Tuesday when the rupee was at risk of slipping past its all-time low of 87.95, currency traders said.

Bankers said that the RBI resumed its intervention in the non-deliverable forwards (NDF) market last week, marking a return to a tool it had mostly avoided under new Governor Sanjay Malhotra.

The central bank's return to the NDF market, though not particularly aggressive, is significant since it allows it to manage offshore expectations - where pressure on the rupee is often most intense, said a Singapore-based currency trader.

Further, India’s foreign exchange reserves fell by more than $9 billion last week, a likely reflection of spot market intervention alongside NDF activity.

(Reporting by Nimesh Vora; Editing by Sonia Cheema)