Rupee gains past 96 per dollar on RBI intervention
The Indian rupee strengthened to 95.8650 against the U.S. dollar on Friday following active central bank intervention and interbank sales. Despite recent gains, analysts expect further weakness toward the 98 level as high crude oil prices and geopolitical tensions in the Middle East continue to weigh on the currency.
The India rupee rose 0.2% to 95.8650 per USD following central bank intervention. The move marks the strongest level for the currency in a week and builds on a 0.6% gain from the previous session. The rupee recovered after falling 6% versus the dollar since late February due to elevated energy prices and sustained capital outflows.
The Reserve Bank of India utilized interbank dollar sales to pull the currency above the 96-per-dollar threshold. This action follows a string of record lows triggered by the conflict in Iran. Analysts at Barclays said Asian currencies face continued pressure unless the Strait of Hormuz opens to stabilize energy markets. Barclays expects the rupee to weaken toward 98.00 per USD in the coming weeks, though at a slower pace than recently observed.
