Rupee slips, muted price action sinks volatility expectations to five-month low
The Indian rupee closed down 0.1% at 95.44 per dollar on Thursday, impacted by dollar outflows linked to derivative maturities and overseas debt repayments. The central bank's frequent interventions have lowered the 1-month implied volatility to 4.2%, its lowest since early March, deterring speculation on the rupee. Meanwhile, India's merchandise trade deficit widened to $31.98 billion in July, exceeding economists' expectations of $30.20 billion.