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Indian rupee holds steady versus dollar as RBI steps in
The INR is supported by strong capital inflows and RBI action, including nearly $73 billion accumulated since June to bolster India’s balance of payments.
The Indian rupee held broadly steady versus the US dollar on Monday, with trading activity expected to remain relatively quiet as investors weigh oil price moves and the potential for Reserve Bank of India intervention, FXStreet reports.
FXStreet said the rupee’s near-term pressure eased as crude oil dipped, with traders taking profits ahead of expected US announcements about stricter sanctions on Iran. The outlet noted that any rebound in oil prices could follow statements from US Treasury Secretary Scott Bessent on plans for unprecedented sanctions, alongside disruptions to Iranian oil shipments, reduced offers to Chinese buyers, and a continuing US naval blockade.
The article also highlighted ongoing geopolitical risk around the Strait of Hormuz, saying vessel transits are running significantly below historical averages. Deutsche Bank analysts cited by FXStreet said Brent futures increasingly reflect that risk, indicating markets are pricing a potentially longer closure of the strait, which could further constrain supply and keep inflation and yield concerns in focus.
FXStreet added that INR downside risk is expected to be cushioned by active RBI support, including the central bank accumulating nearly $73 billion under initiatives launched in June to reinforce India’s balance of payments, pushing reserves toward record levels. MUFG and BTMU analysts also pointed to a shift in tone from the RBI, noting the August MPC minutes were more hawkish than expected and suggesting the RBI has reached the end of its easing cycle with the next meeting ahead.
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