Indian rupee logs weekly decline, with RBI intervention curbing losses

Business Recorder reported that the Indian rupee ended the week weaker against the dollar, though repeated sales of the greenback by state-run lenders limited the decline. The currency closed Friday at 95.4250 per dollar, almost unchanged on the day but 0.2% lower over the week. The rupee stayed within a band of under 30 paisa all week despite steady dollar demand from importers, crude volatility and maturing derivative contracts.

Oil rose after Washington raised the prospect of a naval blockade of Iran with no end date, renewing supply worries. India is especially exposed to such disruptions since it relies on foreign sources for roughly 90% of its oil. Wholesale inflation for July, published on Friday, reached 9.78% on an annual basis, a marginal easing from June as energy inflation was lower. Earlier in the week, July consumer inflation was reported at 4.45%, slightly above the central bank's 4% medium-term goal.

In a note, Barclays analysts expect the monetary policy committee to keep rates on hold through the rest of 2026, attributing the continued increases to food and government-set prices. The bank also projects a 50 basis point tightening during the first six months of 2027. Elsewhere, regional currencies and stocks were mixed, while the dollar index fell 0.2% to 99.7. The yen firmed after Reuters, citing sources, reported a Bank of Japan rate increase planned as early as September.