The Indian rupee closed flat at 95.68 per U.S. dollar on Thursday, with state-run banks selling dollars near its daily low of 95.75 to prevent a breach of the psychologically critical 96 level. The Reserve Bank of India's intervention anchored the currency after it had traded beyond 96 and approached its record low of 96.96 the previous week.
Brent crude oil futures swung between $89 and $93, pressuring the rupee as corporate dollar demand and importer hedging surged. India imports 90 percent of its crude oil, and fresh geopolitical tensions between the United States and Iran have heightened concerns about shipping routes and oil supply flows.
The 30-year Treasury yield reached 5.239 percent on Thursday—a 19-year high—after the Federal Reserve held rates steady. Fed Chair Kevin Warsh's mixed signals on monetary policy and inflation stoked uncertainty in longer-duration fixed-income markets, with the extended end of the curve most vulnerable to repricing risk.
The dollar index remained steady at 100.8, supported by the Fed's hawkish tone and regional currency weakness. Most Asian peers, including the rupee, declined against the greenback.
Amit Pabari, managing director at CR Forex, said: "While recent rupee strength has been aided by RBI intervention, the broader backdrop of elevated crude oil prices, persistent geopolitical tensions, and a Fed that continues to keep the door open for further tightening remains supportive for the dollar."
Over the week, the rupee declined 0.2 percent, closing Friday at 95.4250 per dollar. Persistent dollar sales by state-run banks contained the currency within a range of less than 30 paise, offsetting importer demand and derivative contract maturities.
