The Indian rupee opened lower against the U.S. dollar on Tuesday but traded in a narrow range thanks to suspected intervention from the Reserve Bank of India (RBI).
Traders said it is likely that the RBI sold dollars to prevent the rupee from depreciating further from its 82.7450 opening level. The rupee was at 82.8050 against the dollar by 10:50 a.m., down around 3 paise from Monday's close.
While some traders believe the RBI is intervening to keep the rupee in the 82.80 to 83 range, others note the narrow movement could simply be due to market expectations of RBI action.
Other Asian currencies also weakened against the dollar on Tuesday as the dollar strengthened following hawkish comments from a Federal Reserve official about the need for further interest rate hikes to curb inflation.
