By Anushka Trivedi
MUMBAI, March 21 (Reuters) - The Indian rupee pulled
back from earlier gains on Tuesday, aligning with its Asian
peers as traders cited dollar buying by large players ahead of
the Federal Reserve meeting.
The rupee was flat at 82.64 per dollar by 11:00
a.m. IST, after opening slightly higher at 82.54. The currency
closed at 82.6350 on Monday.
Among efforts to stem further crisis in the U.S. banking
sector, a media report said officials were looking at ways to
temporarily expand Federal Deposit Insurance Corp's coverage to
all deposits.
The impact of this report, however, "would not last long" as
the U.S. central bank's meeting on Wednesday would likely
overshadow it, said Anindya Banerjee, head of research - FX and
interest rates at Kotak Securities.
"Therefore, we could see range-bound price action in the
USD/INR pair between 82.35-82.75."
Some large corporates were bidding for dollars, but the
rupee was unlikely to weaken past 82.70 as exporters would
likely offload the U.S. currency at those levels to capitalise
on higher premiums, said a private bank trader.
Dealers added they were trading "with small positions" as
uncertainty loomed ahead of the Fed meeting.
Fed funds repricing has been quite volatile off late, as at
one point on Monday it indicated higher chances of a pause than
a hike. Currently, it was back to showing a 73% probability of a
25 basis point (bps) rate increase. Bets of a pause went up this week after global central banks
pledged funding to backstop UBS's takeover of Credit Suisse to
tide over the banking crisis that has roiled financial markets
since last week.
Asian currencies were lower, with the Chinese yuan down to 6.8820 per dollar and the Thai baht 0.5% weaker,
failing to take respite from a softer dollar index .
(Reporting by Anushka Trivedi; Editing by Sohini Goswami)
anushka.trivedi.thomsonreuters.com@reuters.net))
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