Indian rupee pressured by Iran talks impasse; RBI intervention a 'reliable' buffer

Business Recorder reported that the Indian rupee faced fresh pressure as it was set to open slightly lower on Monday, after finishing Friday at 95.8125 to the dollar. Stalled US-Iran talks were lifting oil prices, while the central bank's interventions were expected to soften the slide. Traders are watching the 96-per-dollar level closely, since the Reserve Bank of India has stepped in repeatedly whenever the currency neared it.

US President Donald Trump turned down an Iranian plan to end the conflict and reopen the Strait of Hormuz, which kept Middle East tensions elevated and raised fears of lasting oil supply disruptions. Brent crude gained 2.5 per cent, trading near $107 per barrel during Asian hours, and the rise carried over into the US bond market. Yields on 10-year US Treasuries reached 5.2 per cent, which lifted the dollar and put more strain on the rupee and other regional currencies.

Yields on longer-dated US government debt have climbed after strong economic figures, adding to worries that costlier oil will feed inflation. The 10-year and 30-year yields now stand at their highest point in almost two decades. Traders put the chance of another US rate increase in October at more than 64 per cent.