Indian rupee boxed in range; traders focus on oil, outflows and RBI's defence

Business Recorder reported that the Indian rupee finished Tuesday at 95.1150 per dollar, up less than 0.1% from Monday’s 95.1850, after trading in a tight band. Despite the small gain, traders described sentiment as weak, with higher oil prices and equity outflows adding pressure and the currency relying on Reserve Bank of India support.

Brent crude was near $117 a barrel, close to a six-month high, while foreign investors had sold around $8.5 billion of Indian equities over the previous two months. Former RBI governor Raghuram Rajan cautioned against defending a particular exchange-rate level by depleting reserves; the central bank has spent about $80 billion supporting the rupee since June. Elevated US Treasury yields are also drawing investor attention toward dollar-denominated fixed income, while traders are watching how much further weakening the RBI will tolerate.