RBI likely intervened to shield rupee as oil prices climb, traders say
State-run banks were seen offering dollars, likely on behalf of the RBI
The Reserve Bank of India may have stepped in to support the weakening rupee on Tuesday, according to comments from four traders to Reuters. Rising oil prices and speculation about a potential interest rate increase in the US were cited as factors that put pressure on the South Asian currency. The rupee slipped 0.2% to 95.79, nearing its lowest point in a month.
Observers noted that state-run banks were observed selling dollars, most likely on behalf of the RBI, to curb excessive volatility. The dollar sales were not particularly substantial and seem to be a measure to keep market fluctuations in check, according to a trader at a Mumbai-based bank. Meanwhile, Brent crude oil prices rose 1.2%, reaching $106.9 per barrel.
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