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Rupee weakens for third day as oil rally pressures USD/INR
USD/INR hit a fresh 10-day high at 95.31, while RBI support through spot and NDF intervention and $136.38bn in FX mobilisation via FCNR(B) has so far offered limited relief.
The Indian rupee extended its losing streak against the US dollar for a third straight trading day, with USD/INR reaching a fresh 10-day high of 95.31, as FXStreet said the rally in oil prices continued to weigh on the currency.
In early trading, the MCX Crude Oil contract expiring September 21 was up 0.5%, moving closer to an over three-month high of Rs. 9,189, and the outlet tied the rupee’s underperformance to India’s reliance on oil imports in a higher-oil-price environment.
FXStreet reported that the Reserve Bank of India has continued to intervene in spot and Non-Deliverable Forward markets to limit one-way excessive depreciation, noting that while intervention has been fairly forceful at times, it has provided only limited relief.
The outlet also cited foreign inflows received by the RBI through the FCNR(B) window as evidence the central bank has liquidity to support the rupee, adding that Societe Generale’s EM strategists referenced RBI disclosures that it raised $136.38bn through FX mobilisation schemes, including the FCNR(B) window launched in early June.
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