Indian rupee strengthens on firm central bank intervention, oil retreat

Business Recorder reported that the Indian rupee firmed slightly on Friday, helped by a timely intervention from the central bank early in trading. Cheaper oil also provided support after US President Donald Trump pledged to hold off on attacking Iran until after next month's elections in the United States. Brent crude slipped about 1.5 per cent, and the rupee rose 0.2 per cent to 96.61 against the dollar.

Traders said the central bank appeared to step in near 96.80 when the currency came under pressure early in the session, and two described its action as somewhat larger than usual. The aim seemed to be checking bets on a persistent fall in the rupee. The currency has leaned heavily on such support to keep clear of its record low of 96.96 reached in May, and it is the second-weakest performer in the region so far in 2026.

Pressure has persisted as worries about the Iran conflict weigh on hedging and portfolio flows. ANZ said in a note that a slow, controlled slide in the currency looked the most likely path, one that avoids speculative swings and limits concerns about imported inflation. Earlier in the week, the Reserve Bank of India lifted rates, its first increase since February 2023, and hinted at more to come. Elsewhere, the dollar index eased slightly in line with US bond yields, while regional stocks and currencies also gained.