96.56 is within reach, Reserve Bank of India steps in to stabilize, rupee safe-haven battle continues

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智通财经2026/07/24 10:26

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The Indian rupee successfully avoided hitting a new all-time low on Friday, mainly because the Reserve Bank of India was suspected to have intervened to ease multiple pressures from high oil prices, weak domestic stock markets, and rising corporate hedging demand.
Several state-owned banks sold US dollars even before the market opened, and this selling pressure persisted through most of the trading session. As a result, the rupee closed near 96.56, largely unchanged for the day, temporarily holding at a key psychological level.
Brent crude oil briefly broke above $100 during intraday trading, reaching a two-month high. Although it later fell back by about 4%, escalating tensions in the Middle East and concerns triggered by Trump's tariff remarks continue to boost global energy uncertainty.
India relies on imports for nearly 90% of its crude oil; soaring oil prices directly increase risks of inflation and current account deficits. This raises demand for US dollars and puts ongoing pressure on the rupee, pushing it once again close to the record low set in May.
To stabilize the exchange rate, in addition to intervening in the spot and non-deliverable forward markets, the Reserve Bank of India is also suspected to have hedged liquidity shocks through long-end USD/INR swap transactions, resulting in a decline in the 15-month forward premium.
Corporate hedging activity against rupee depreciation has clearly rebounded. Institutional data shows that net forward dollar purchases have risen significantly recently, indicating that expectations of rupee weakness in the market have not subsided.
Institutional analysis points out that the recent rupee weakness, combined with the rebound in oil prices, may have already surpassed market expectations. This could trigger a new round of risk-averse hedging, making short-term currency market dynamics still uncertain.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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96.56 is within reach, Reserve Bank of India steps in to stabilize, rupee safe-haven battle continues

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