The Reserve Bank of India (RBI) has reportedly stepped in to support the Indian rupee following a sharp increase in oil prices, which was triggered by recent Israeli strikes on Iran. According to three traders familiar with the matter, the central bank sold U.S. dollars to ease the pressure on the rupee, which had weakened amid the volatile market conditions.
The Indian currency briefly slipped to 86.20 against the U.S. dollar before recovering to 86.04 after the RBI’s intervention. One currency trader, citing information from two state-owned banks, confirmed that the central bank sold dollars around the 86.05 level.
The oil price surge, influenced by geopolitical tensions in the Middle East, posed a significant risk to India’s currency stability, prompting the RBI to act promptly. The central bank’s move aims to maintain orderly market conditions and prevent further depreciation of the rupee, which could have broader economic implications.
This intervention reflects the RBI’s ongoing commitment to safeguarding the domestic currency amid external shocks, especially given India’s status as a major oil importer vulnerable to fluctuations in global energy prices.
