A pullback in crude oil prices offered some relief to the currency after a week of persistent pressure. However, the rupee remains under strain, with bankers saying its roughly 0.2% weekly decline understates the underlying weakness.
The Reserve Bank of India’s near-daily intervention across multiple levels has helped absorb dollar demand and limited the rupee’s moves, bankers said. They added that maturities in the non-deliverable forward market and strong dollar demand from importers have been key sources of pressure.
Oil prices offer some relief
Brent crude fell more than 2% on Thursday (August 13) and extended losses in Asian trading, easing to around $86.50 a barrel. The decline came despite a US threat to maintain a naval blockade of Iranian ports indefinitely.
Lower oil prices and a broadly supportive risk environment could help the rupee at the open, but the gains may remain limited, a currency trader at a private-sector bank said.
The trader said persistent RBI intervention has supported the rupee, leaving limited room for a sustained recovery even as oil prices ease.
Oil prices remain supported by uncertainty around the Strait of Hormuz, a key route for global oil shipments. ING Bank said the US appears focused on economic pressure rather than military escalation, but significant hurdles remain before any broader agreement can be reached.-With Reuters inputs
