Indian Rupee Slips to Record Low

The Indian rupee hovered around 95.2 per dollar, holding steady after recent gains as continued Reserve Bank of India intervention and reduced expectations of a September Federal Reserve rate hike provided support. The rupee has been in recovery mode over the past two weeks, aided by regular RBI intervention. Brent crude rose to around $84.50 a barrel on Monday but remained well below its recent high of $100, providing some breathing room for the rupee. The RBI also intervened at the open on Friday, signalling its willingness to prevent oil-price uncertainty from translating into unchecked pressure on the currency. Meanwhile, investors pared bets on a September Fed rate hike after US employers unexpectedly shed 23,000 jobs in July, with Fed funds futures now implying a 44% probability of a hike, down from 55% before the data. The RBI's continued presence in the foreign exchange market has helped cushion the rupee from oil-related pressure and limit downside risks.

The Indian rupee fell to around 95.25 per dollar, retreating from four-week highs as a rebound in oil prices revived concerns over India's import bill and inflation outlook. Brent crude rebounded above $83 a barrel, extending gains for a third straight session after rising about 4% on Thursday. The move followed a proposal by Iran and Oman to restrict vessels deemed hostile, stoking fears over supply disruptions. Investors also turned cautious ahead of the US July nonfarm payrolls report, with economists expecting 80,000 jobs to have been added after 57,000 in June and the unemployment rate to remain at 4.2%, as the data could influence expectations for further Federal Reserve rate hikes. Meanwhile, traders monitored the Reserve Bank of India, whose recent dollar sales had helped lift the rupee to a one-month high, though persistent underlying demand for dollars suggested the currency's near-term direction would continue to depend on the extent of RBI support.

The Indian rupee hovered around 95.1 per dollar, steadying after its recent rally as demand for dollars from importers and speculative traders offset support from a weaker greenback. The currency remained underpinned by broad dollar weakness as easing expectations of a Federal Reserve rate hike next month and softer oil prices improved sentiment toward emerging-market currencies. Meanwhile, optimism over a potential US-Iran peace deal kept pressure on the dollar and weighed on crude prices, with Brent holding below $80 per barrel. Traders also scaled back bets on a September Fed rate increase after weak US private employment data, with the implied probability falling to 55% from nearly 70% at the start of the week. Earlier, the Reserve Bank of India kept its repo rate at 5.25% for a fourth straight meeting, maintained a neutral stance, and raised its FY2026/27 and FY2027/28 growth forecasts despite softer business activity.