Brent crude at $100 offsets RBI’s $20bn capital inflow measures, pressuring the rupee near record highs.
The Indian rupee remained under pressure as Brent crude prices surged to $100 per barrel, countering recent policy efforts to attract $20bn in capital inflows. The Reserve Bank of India intervened in onshore and offshore markets to stabilize USD/INR near May’s record highs.
Recent measures, including FCNR deposits and external commercial borrowings, generated $20bn in inflows. However, rising oil costs and a rebound in 1-year INR OIS rates to 6.05% overshadowed these gains, retracing 25 basis points from post-RBI lows.
The RBI’s interventions aimed to curb volatility, but higher energy prices and shifting rate expectations continue to dominate sentiment, keeping the rupee defensive.