The Reserve Bank of India (RBI) likely sold dollars via state-run banks after the rupee slid to a record low on Thursday, several dealers said, as fears of foreign outflows from India are roiling domestic bond and stock markets.
The intervention was spotted when the rupee hit 59.90 to the dollar or below, these traders said. The rupee fell after the Federal Reserve signalled an end to its monetary stimulus and after China turned the screw on credit even as factory activity in the world's second largest economy hit a nine-month low.
The rupee's recovery was also helped by expectations the government may take steps to arrest the slide. India's chief economic adviser is scheduled to brief reporters at 11.15 a.m.
The rupee was at 59.63/64 to the dollar at 10.40 a.m., after earlier falling to a record low of 59.9350. The currency closed at 58.71/72 on Wednesday.