Indian rupee under pressure with Brent near $100 testing RBI defence

Business Recorder reported that the Indian rupee could weaken further on Wednesday as a fresh climb in crude prices tests the Reserve Bank of India's capacity to steady the currency. Traders expected it to open between 94.84 and 94.86 against the dollar, after the rupee closed at 94.8175 in the previous session. On Tuesday the currency posted its biggest decline in nearly a month, as oil gains outweighed the central bank's attempts to hold it steady.

The central bank has stepped in regularly over recent weeks to lift the rupee, helping it reach a two-month peak late last week. Although the RBI was active on Tuesday, traders said its support fell short of halting the decline. A currency trader at a bank said this could signal a more cautious approach when oil drives the pressure, as the RBI may be wary of using its foreign exchange reserves.

Oil prices have risen for four straight sessions after Iran launched new strikes on American military assets in the Gulf. Brent crude reached $99.66 per barrel, its highest since late July, as worries grew that the conflict between Washington and Tehran could spread across the region. Higher crude could also add weight to arguments for a Federal Reserve rate increase next week, lifting the dollar and adding strain on the rupee.