The rupee rose 8 paise to 94.88 against the U.S. dollar, a modest lift from Friday’s 94.96, and settled near the 95‑per‑dollar zone that has been a focal point for market watchers.
RBI’s active intervention has been a clear signal: the central bank has been buying and selling dollars in the spot market to blunt volatility, a tactic that helped the currency recover from last week’s slide. According to the latest RBI filing, foreign‑exchange reserves fell to $726 billion from a record $786 billion earlier in September, underscoring the bank’s counter‑cyclical stance.
Oil prices have kept the rupee on a knife‑edge. Brent crude last traded at $108 a barrel after briefly breaching $110, a level that last month nudged the import bill higher and pushed dollar demand up. The higher import bill translates into a heavier outflow of dollars, tightening the rupee’s peg unless RBI steps in.
Looking ahead, traders anticipate continued dollar sales from the RBI as long as oil prices stay near or above $105. The 95‑per‑dollar threshold will remain a key reference point, but a sustained dip in oil could ease pressure and give the rupee room to strengthen. Market participants are watching the next RBI meeting for any adjustment in the dollar‑sale strategy, while the upcoming U.S. inflation data may also influence global dollar flows.