New Delhi, July 23: Geopolitical friction in the Middle East continues to weigh heavily on Indian foreign exchange markets, even as Reserve Bank of India actions helped the rupee inch up to 96.48 against the US dollar. The currency had logged a 28-paise decline in the previous session, closing near historically low levels as crude oil surged following fresh military strikes by the United States on Iranian targets.
Market watchers reported that state-run financial institutions stepped in during trading to sell dollars on behalf of the central regulator, absorbing selling pressure driven by foreign institutional investors.
“State-owned banks were seen selling dollars — widely viewed as intervention on behalf of the RBI — around the 96.50 level,” maintained Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. “This prevented a steeper depreciation, but the rupee still closed lower on Wednesday. It remains near its all-time closing low, and if oil prices keep rising, we may see it crossing this level.”
After starting the session at 96.53, the local unit experienced a modest 5-paise gain. Weakness in domestic equity benchmarks and high energy import costs continue to threaten stability, though a slight decline in the global dollar index offered partial relief.
Traders anticipate bounded trading through the session as regulatory support confronts persistent global risk factors.
“The rupee is expected to move in the range of 96.50-96.65 in Thursday’s session, with risk tilted to the downside, although support from the RBI is likely to limit the losses,” affirmed Aamir Makda, Commodity and Currency Analyst at Choice Broking. “Key support levels would be at 96.10-95.80.”
