The rupee’s slide despite improving portfolio flows, equities have flipped to inflows and debt has stayed positive, points to the pressure being driven more by oil-linked importer demand and broader risk aversion than by any capital flight narrative, which limits how much a…
ow-based recovery could help near term. The RBI’s near-daily intervention across spot and forward markets shows clear intent to slow the pace of decline, but traders characterize the scale as measured rather than aggressive, suggesting the central bank is managing volatility rather than defending a hard line near the record low
With the currency now within half a percent of its all-time trough, any further escalation in oil prices tied to the Middle East conflict could test whether the RBI shifts to a more forceful defense. The rupee is sliding toward its record low even as the RBI intervenes almost daily across spot and forward markets, with traders describing the central bank’s defense as measured rather than an attempt to hold a hard line, leaving the currency exposed to further oil-driven pressure. Summary: The Indian rupee is expected to open Friday in the 96.40 to 96.44 range against the US dollar, having settled at 96.3450 on Thursday, according to Reuters.
The currency is on a four-session losing streak and now sits less than 0.5% from its record low of 96.96 per dollar, hit in May. The Reserve Bank of India has been intervening almost daily in both spot and non-deliverable forward markets to support the rupee, though traders described the scale of intervention as relatively measured given the intensity of pressure on the currency. The decline comes despite a turnaround in portfolio flows, with foreign investors buying about $1.5 billion of Indian equities so far this month, reversing more than $5 billion in outflows in June.