Rupee Gains 9 Paise To 94.80, RBI Intervention Supports Recovery Amid $110 Crude Oil Concerns

Mumbai witnessed a strengthening of the Indian rupee by 9 paise to 94.80 against the US dollar, as per early trading on Monday. The Reserve Bank of India's (RBI) ongoing intervention in the forex market played a significant role in this rally, which marks the rupee's strongest gain in seven months. However, concerns surrounding high crude oil prices, foreign fund outflows, and rising US bond yields continue to pose challenges for the currency.

The rupee opened at 94.90 against the US dollar in the interbank foreign exchange market and managed to climb to 94.80, marking a 9-paise gain from the previous Friday's closing level of 94.89. India's forex reserves took a hit, falling by $8.58 billion to $726 billion during the week ending October 9, following a $12.95 billion drop in the previous week.

Forex traders are of the opinion that RBI's intervention has helped stabilize the currency despite the ongoing global economic uncertainty. Amit Pabari, Managing Director of CR Forex Advisors, mentioned that the USD-INR pair has stayed below 95 for three consecutive trading sessions and expects the crucial range to be 94.80–94.70. A sustained drop below 94.80 could potentially push the dollar-rupee pair towards 94 in the coming weeks. However, the trajectory of the currency largely depends on global crude oil prices.

Brent crude futures experienced a decline of 1.88 percent, settling at $107.79 per barrel, although prices have lately near $110. Geopolitical tensions, such as attacks on commercial vessels near the Strait of Hormuz and threats to Saudi energy infrastructure, have raised apprehensions about global oil supplies. Higher oil prices might escalate India's import bill, thereby exerting additional pressure on the rupee.