Traders expect RBI support to limit volatility, but pressure from oil prices and US bond yields remains.
MUMBAI:
The Indian rupee was expected to remain confined near 94.48–94.50 against the US dollar on Tuesday as elevated crude-oil prices and importer hedging countered support attributed by traders to the Reserve Bank of India.
The assessment was published before the market opened and should not be treated as a confirmed closing rate. The rupee had recovered from approximately 95.70 to 94.50, but traders said momentum had slowed as importers used the stronger level to purchase dollars.
Brent crude was trading near $97 a barrel amid continuing US-Iran tensions and concern about threats to shipping and energy infrastructure in the Gulf. India imports about 85 per cent of its crude requirements, making sustained oil-price increases a risk to inflation, the current account and the currency.
Higher US Treasury yields have added pressure by strengthening the relative attraction of dollar-denominated assets. Goldman Sachs raised its December 2026 Brent forecast by $5 to $85 a barrel, citing the likelihood of continued disruption to Middle Eastern shipping. Its higher-price scenario is a forecast, not an established outcome.
Market participants reported RBI activity around the 94.50 level. The central bank does not ordinarily disclose its intervention in real time, and the reported operations therefore represent assessments by traders rather than an official confirmation.
The currency’s direction will depend on crude prices, actual RBI activity, foreign investment flows and importer demand after trading begins.
