The Indian rupee slipped 0.4% to 96.78 on Wednesday before rebounding 0.1% to 96.68 on Thursday, the first gain since the currency slid to a 5‑month low earlier in the week. RBI’s overnight repo rate hike and shift to a hawkish stance appear to have triggered a catch‑up run, with spot traders tightening positions after the policy announcement.
The Reserve Bank of India’s move to raise the repo rate was described by Goldman Sachs as a hawkish rate hike, prompting a mix of hedging and liquidity adjustments among currency traders. A break above the 97‑level could prompt importers to lock in forward rates, while exporters may delay dollar sales, a trader noted.
Meanwhile, global oil prices add pressure, with Brent crude trading above $102 a barrel as supply concerns in the Middle East and shipping disruptions through the Gulf and Strait of Hormuz persist. The sustained rise in crude prices inflates India’s import bill, tightening dollar demand and pushing the rupee back toward weaker levels.
Market participants now focus on RBI’s likely next move, with Goldman Sachs projecting a further 25 basis‑point hike in December. Analysts view the 97‑level as a critical support that could dictate the rupee’s near‑term trajectory and influence the RBI’s policy cadence over the coming months.