INDIA RUPEE-Firm central bank intervention, short culling helps shore up rupee

By Jaspreet Kalra

MUMBAI, August 1 (Reuters) - The Indian rupee found its footing on Friday after slipping to within striking distance of a record low in the previous session, as firm intervention by the central bank and a cutting of short bets against the currency helped it stabilise.

The rupee INR=IN strengthened to 87.3025 against the U.S. dollar as of 11:00 a.m. IST, up 0.3% on the day, following 12 consecutive sessions of either logging a decline or closing flat.

The currency had declined to a low of 87.74 on Thursday, inches away from its all-time low of 87.95, after President Donald Trump slapped steeper-than-expected tariffs on Indian goods, with analysts also warning of sustained pressure on the country's growth.

The Reserve Bank of India likely intervened in both the non-deliverable forward market and the local over-the-counter spot market to support the rupee, traders said.

The central bank seems to be inclined to stabilise the currency, and "they have been heavily hitting the (USD/INR) pair since the morning,” a trader at a state-run bank said.

The intervention also spurred traders to exit short bets against the currency, which helped it extend its gains, a second trader at a bank said.

Foreign portfolio outflows have also been a consistent pain point for the rupee as overseas investors remained net sellers of Indian stocks over the last nine consecutive trading sessions.

Sentiment on the rupee is quite weak right now, so it makes sense for the RBI to step in, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.

Meanwhile, the dollar index was hovering at the 100 mark, and Asian currencies fell as investors fled riskier regional assets after the U.S. imposed sweeping new tariffs on dozens of trading partners.

The Korean won led losses with a 0.6% decline as investors also awaited key U.S. labour market data due later in the day to gauge the future path of benchmark policy rates in the world's largest economy.