Indian rupee oil-fuelled slide to persist, RBI support seen offering limited relief

Business Recorder reported that the Indian rupee is set for another session under pressure from higher oil prices, with support from the central bank expected to slow the currency's decline rather than halt it. Traders expect the unit to open between 95.15 and 95.20 to the dollar, after it settled at 95.1050 on Wednesday. The rupee has slipped roughly 0.7% across two trading days, after largely ignoring earlier crude rallies.

A currency trader at a bank said the rupee's behaviour has shifted after a stretch of resilience, with crude still climbing and little sign of near-term relief. The RBI has kept intervening, and was quite assertive at one moment on Wednesday, yet its support has so far offered only modest relief, bankers said. Brent crude stayed above the $100 a barrel level on Thursday as hostilities between Iran and the US escalated, and traders noted the rupee has been more sensitive to oil than other exposed Asian currencies.

Pressure also came from the US 10-year Treasury yield, which rose to its highest since 2023 after a disappointing Treasury buyback and a fresh oil rally. Recent military strikes on shipping have also raised concerns about how far and how long supply constraints will last.