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The Indian rupee saw a positive turn on Wednesday, thanks to likely dollar sales by the Reserve Bank of India (RBI) and a decline in crude oil prices, which helped prevent the currency from reaching a record low.

Closing at 83.0725 against the U.S. dollar, the rupee showed resilience compared to its previous session’s close at 83.2675 on Monday.

While the Asian currency landscape experienced mixed results, with the Korean won and Thai baht declining, the Malaysian ringgit made gains against the dollar.

Early in the trading session, the rupee dipped to an intraday low of 83.2650. However, traders noted that likely dollar sales by the RBI in both the non-deliverable forward and over-the-counter markets played a significant role in preventing further depreciation. It’s worth noting that the rupee had touched a record low of 83.29 per dollar in October the previous year.

Exporters’ dollar sales contributed to the rupee’s recovery in the latter half of the session. Later in the day, the RBI was observed selling dollars, which some traders interpreted as “preventive selling” ahead of the U.S. Federal Reserve’s policy decision scheduled for later that day.

Anindya Banerjee, head of foreign exchange research at Kotak Securities, suggested that if the Federal Reserve adopts a dovish stance, the rupee may strengthen to levels between 82.80 and 82.90. Otherwise, the rupee could continue trading in a range, with the extent of depreciation contingent on the RBI’s actions.

The U.S. central bank was widely expected to maintain unchanged interest rates. In Asia, the dollar index (DXY) was down by 0.11%, while the 10-year U.S. Treasury yield fell 2 basis points to 4.34%, stepping back from its 16-year high reached on Tuesday.

The rupee’s positive performance was further aided by lower Brent crude oil futures, which declined by 0.95% in Asia to $93.44, following a year-to-date high of $95.96 on the previous day. Goldman Sachs also revised its year-ahead Brent forecast to $100 a barrel, up from the previous $93 projection.

In summary, the Indian rupee displayed resilience through likely RBI interventions, exporter support, and the influence of external factors like the Fed’s policy decision and oil prices. As the rupee continues to navigate these dynamics, its performance remains subject to ongoing market developments.