The Indian rupee closed almost with no change on Monday, as demand from importers and foreign banks offset initial gains driven by a stronger performance of most Asian currencies. The rupee closed at 83.90 against the US dollar, almost the same as its previous close of 83.89. It reached a high of 83.81 during early trading. Similar to last week, the rupee struggled to maintain its gains due to increased dollar demand from importers and foreign banks, according to a trader at a private bank. The rupee has not been able to take advantage of the dollar's decline in August and may not participate in the emerging market rally following Federal Reserve Chair Jerome Powell's indication of upcoming rate cuts on Friday. Amit Pabari, managing director at FX advisory firm CR Forex, predicts the rupee will likely trade between 83.75 and 84 in the near future. Strong dollar demand from importers and outflows from Indian equities have contributed to the rupee's limited gains in recent sessions. Overseas investors have withdrawn approximately $2 billion from Indian stocks in August. The dollar index remained close to its lowest level since December, while most Asian currencies appreciated by 0.1 to 0.7 per cent. The dollar-rupee 1-year forward premium jumped to a peak of 2.14 per cent, the highest since May 2023, before retreating slightly. This surge reflects the increased likelihood of a larger rate cut at the Fed's September meeting, following Powell's more dovish comments. Attribution: Reuters Subediting: Y.Yasser
