Rupee bounce fizzles as RBI intervention thins, arbitrage flows pick up

The rupee initially rose to 94.9375 intraday on dollar sales by state-run banks on behalf of the RBI, but reversed sharply to settle flat at 95.2775 as intervention thinned. Stop-losses on long rupee positions were triggered after the currency breached the 95 level, with arbitrage demand between non-deliverable and deliverable forward markets adding pressure. Traders flagged that USD/INR remains prone to further weakness absent sustained RBI dollar supply, with focus on the US June non-farm payrolls report and Fed commentary supporting the dollar.