The Indian rupee held steady Monday as the Reserve Bank of India deployed state-run banks to supply dollars, keeping the currency above 85.50 against the U.S. dollar—a floor the central bank has defended since late July.
The intervention targeted both spot and forward markets. Dollar-rupee forward premiums compressed as a result, cutting hedging costs for Indian importers and signaling the RBI's determination to limit depreciation.
Oil prices are the primary driver of rupee pressure. India imports the bulk of its crude, so higher prices translate directly into larger dollar outflows from importers. Weak capital inflows and ongoing Middle East conflict, which keeps crude volatile, compound that pressure.
Asian currencies showed mixed moves against the dollar Monday, while regional equities broadly gained.
