Indian rupee's familiar push-pull set to persist with oil pressure, RBI response

Dealers expect the Indian rupee to start Tuesday with little movement, as it stays caught between costlier oil, companies buying dollars to guard against currency risk, and steady intervention by the Reserve Bank of India. The currency closed Monday at 94.4850 against the dollar, and the opening range is seen at 94.48 to 94.50, according to traders.

The rupee has climbed from about 95.70 to 94.50, but its momentum has faded as oil rises and importers, having benefited from the recovery, have locked in their dollar needs, bankers said. The RBI, which drove the rally through steady dollar sales, now appears focused on soaking up strain from crude and US bond yields rather than lifting the currency further. A currency dealer at a lender said the central bank is very engaged around 94.50 and may prefer to hold that level.

Brent crude edged up to nearly $97 a barrel on Tuesday, as US-Iran hostilities and threats against Gulf energy sites heightened fears that shipments through the Strait of Hormuz could be interrupted. The benchmark had already gained almost 8% the previous week, and Goldman Sachs now sees Brent at $85 for December 2026 and $80 for 2027, up $5 a barrel, based on the view that Middle East shipping problems will last into next year. The bank cautioned that risks are tilted sharply to the upside, with Brent potentially reaching $120 in its bullish case.