RBI Sells Dollars to Support Rupee Amid Oil Price Surge
The Reserve Bank of India likely sold dollars on Monday to support the rupee as oil prices rose. The move helped the currency recover from near record lows.
The central bank of India is believed to have intervened in the foreign exchange market on Monday to stabilize the local currency. Traders reported that the US Dollar / Indian Rupee exchange rate faced resistance as the authorities sold dollars to prevent the currency from sliding to fresh record lows. The intervention occurred before the official opening of the local spot market, helping the rupee rebound from 92.30 to 92.20 in the interbank order matching system. This follows a period of intense pressure where the currency touched an all-time low of 92.3025 last week. Global market volatility has intensified following a 20% jump in crude oil prices, which has triggered a widespread selloff in Asian stocks and currencies. The rising energy costs are a concern for multinational corporations like Colgate-Palmolive Company, as investors worry about the impact of the Middle East conflict on global supply chains and inflation. Market observers noted that the intervention was a strategic response to the rapid shift in investor sentiment. > The central bank likely stepped into the foreign exchange market on Monday to limit the rupee's decline as a surge in oil prices pummelled currencies across Asia.
