The Indian rupee closed at 96.20 on Thursday, marking a 0.6% increase from its previous close of 96.82, following aggressive intervention by the Reserve Bank of India (RBI) to curb its recent decline.
The central bank's strategy involved heavy dollar sales through state-run banks, aiming to stabilize the currency after it hit a record low of 96.96 the day before.
This intervention was more assertive compared to recent sessions, reflecting the RBI's discomfort with the rupee's rapid depreciation from 94.50 on May 8.
Despite the intervention, the rupee briefly surpassed the 96 per dollar mark before retreating. Traders noted that state-run banks continued to sell dollars intermittently throughout the session.
Meanwhile, the Indian government is exploring all options, including a potential interest rate hike, to stabilize the currency, according to Bloomberg News.
In broader Asian markets, currencies fell between 0.1% and 0.4% as Brent crude oil prices remained above $100 per barrel, driven by geopolitical tensions and ongoing U.S.-Iran negotiations.
Background
The rupee has been under pressure due to rising global oil prices and geopolitical tensions, which have increased India's import bill and affected the currency's stability.
Looking ahead, market participants will closely monitor the RBI's next moves and global oil price trends, which could further impact the rupee's trajectory.
