Traders, who requested anonymity as they were not authorized to speak publicly, reported that the Reserve Bank of India (RBI) sold US dollars in both the offshore and onshore foreign exchange markets to support the rupee, driving the currency higher.

The dollar-rupee 1-month NDF briefly fell 0.4% to 96.82. Traders noted that the offshore dollar selling commenced before the local market opened at 9:00 AM Mumbai time.

The dollar-rupee pair dipped 0.1% to 96.4962.

Traders indicated that the volume of dollar selling in the offshore market was substantial.

Note: The onshore rupee is trading near its record low of 96.9650, hit in May. The rupee is one of Asia's worst-performing currencies this year, having depreciated by nearly 7% year-to-date.