USD/INR drops 0.5% as RBI spot market intervention and potential 5 June rate hike support the rupee amid oil price pressures.
The Indian Rupee strengthened as USD/INR fell 0.5% to 95.71 on Friday, trimming weekly losses to 0.3%. The Reserve Bank of India’s spot market interventions and tighter gold import rules provided support amid persistent pressure from high global oil prices and strong USD demand.
Prior to this, INR faced downward momentum due to elevated crude costs and robust dollar demand. Analysts noted that RBI’s recent measures, including gold import restrictions, helped stabilize the currency. Reports suggest Governor Sanjay Malhotra may raise rates at the 5 June meeting to further bolster INR.
Additional measures, such as USD bond issuance and special deposit schemes targeting non-resident Indians, could accompany the rate hike. Similar strategies were deployed during the 2013 Taper Tantrum to defend the rupee.