Indian rupee ends nearly flat as traders remain glued to oil moves, RBI caps fall

According to Business Recorder, the Indian rupee finished Tuesday almost unchanged at 95.98 per dollar, recovering from an early slide to a two-month low. Crude oil movements continued to steer the currency, while suspected intervention by the central bank helped contain the decline.

The rupee had initially weakened 0.2 per cent to 96.1475 before Brent crude retreated from a peak near $108 a barrel, easing pressure on the currency. State-run banks were reportedly selling dollars, most likely for the Reserve Bank of India, and traders said sentiment improved as oil cooled. India buys nearly 90 per cent of its crude from abroad, which leaves the currency highly exposed to Middle Eastern supply disruptions.

Market participants are watching US and Iranian contacts with mediators, after President Donald Trump said over the weekend that he had turned down an Iranian peace proposal. Uncertainty has kept oil and US Treasury yields high and supported the dollar, with the 10-year yield at 5.246 per cent and the dollar index up 0.3 per cent at 101.5. ING analysts said the dollar needs steadier bonds to fall, an outcome that depends heavily on oil.