The rupee slipped 7 paise to 95.88 against the dollar, trading down from Friday’s close of 95.81, as Brent crude rose 2.5% to roughly $107 a barrel—new highs for the week.
The Reserve Bank of India’s daily brief noted that the central bank has been intervening whenever the rupee nears the 96-per-dollar mark, a threshold that has attracted a surge in hedging activity from importers. The RBI’s recent purchases of foreign currency have so far prevented the rupee from sustaining a move beyond 96, cushioning the impact of higher oil prices.
Meanwhile, U.S. Treasury yields have spiked, with the 10‑year yield climbing to 5.2% and the 30‑year at 5.3%, the highest levels in almost two decades. The rise in yields—boosted by robust economic data and a 64% market‑priced probability of a Fed rate hike in October—has strengthened the dollar and amplified pressure on the rupee.
Looking ahead, traders will watch for any shift in RBI policy as oil prices remain buoyant and U.S. yields stay elevated. If the rupee breaches the 96 barrier, the central bank may increase intervention to stem a further slide, while sustained oil price gains could keep the rupee in a defensive stance until the next RBI announcement.