Reuters is noting that the Indian central bank is likely intervening in the FX market to limit the rupee’s drop today, citing three traders on the matter. USD/INR continues to scale higher to start the week, as a renewed jump in oil prices is weighing heavily on the rupee amid a worsening economic outlook for India.
After a brief recovery from the end of March to early April, the rupee has been sliding back as higher oil prices continue to weigh heavily on the Indian economy in general. The country is the world’s third-largest importer of crude oil and have been heavily hampered by the closure of the Strait of Hormuz.
And with the prospect of talks this week seemingly falling apart again, that is creating a fresh batch of worries for oil prices and now also for the rupee again.
Despite purported intervention by the RBI, USD/INR continues to stay underpinned though. The currency pair traded to around 94.965 earlier before a knock down to 94.905 but is now trading back up to around 94.950 again.
