MUMBAI, Aug 13 (Reuters) - The Indian rupee was marginally down on Thursday, as the central bank continued to sell dollars to anchor the local currency in a narrow band despite pressure from contracts maturing in the forward market and debt-related outflows.
The rupee was at 95.36 per dollar, down marginally from its previous close and hovering in a 1 paisa intra-day range.
The market was subdued with both Indian and U.S. July inflation data largely meeting economists' expectations the previous day, while oil prices continued to hold just shy of the $90 per barrel mark, sapping traders of immediate cues.
To top it all off, state-run banks were spotted consistently offering dollars in the face of elevated interbank and corporate demand.
"For speculators, there is little to do except exit positions at narrow profits or losses," a trader at a Mumbai-based bank said.
Dollar-rupee forward premiums were modestly lower on the day as well, with the 1-year forward implied yield down 3 basis points at 2.74%.
Indian bond yields were a tad lower as well, with the inflation data expected to bolster the central bank's case for keeping rates unchanged.
"We believe that the RBI will continue to maintain its neutral stance for now, but we see some signs that inflation is likely to broaden out more moving forward given firm domestic demand, accelerating credit growth and overall supportive fiscal position," MUFG said in a note.
Meanwhile, regional stocks gained after U.S. inflation data dented wagers on imminent Federal Reserve rate hikes. Indian equities, though, bucked the trend with a 0.4% fall in the Nifty 50 index.
Investors are keeping an eye on oil prices as Iran and the U.S. remain at loggerheads over efforts to agree to an end to the war in the Gulf, with talks to revive a June interim agreement making no headway.
Reporting by Nimesh Vora; Editing by Harikrishnan Nair
Source: Reuters