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Rupee slips to 96.50 as RBI intervention rumors resurface
A Reuters report said the RBI is likely selling dollars near 96.80 INR, while stronger US rate expectations and oil price gains threaten renewed pressure on USD/INR.
The Indian rupee rose early Friday, with USD/INR falling to around 96.50 after renewed rumors of Reserve Bank of India support, according to FXStreet. Citing a Reuters report, FXStreet said the RBI is likely selling US dollars near 96.80 INR levels, and that state-run banks were seen offering dollars, most likely on the RBI's behalf. FXStreet also noted earlier rumors that the central bank intervened in both spot and non-deliverable forwards markets on Thursday. FXStreet warned the support may be short-lived, pointing to surging oil prices and a revival of Federal Reserve rate hike expectations as potential headwinds for the rupee. It said oil prices jumped after renewed US-Iran tensions, with Yemen's Iran-aligned Houthis closing the Bab el-Mandeb Strait, tightening global energy supplies. The piece added that CME FedWatch puts the odds of a Fed hike next week at 35.8%, up from 11.8% last week, and said US Treasury yields were around 4.70%, the highest since January 2025. FXStreet also cited India’s July HSBC flash composite PMI dropping to 54.3 from 57.1 in June, as manufacturing and service activity slowed.