Rupee Under Pressure Near Record Low
The Indian rupee is expected to remain under pressure near record lows despite some relief from falling oil prices, as maturing non-deliverable forward positions and capital outflows continue to drive dollar demand. The Reserve Bank of India was seen intervening through state-run banks to limit further losses, helping the rupee hold just above its weakest-ever levels. The currency’s weakness stood out even as Indian equities and bonds showed signs of recovery.
Rupee Stays Under Pressure Near Record Low
The rupee hovered close to its record low as market demand for dollars remained elevated. Traders said the main pressure came from the maturity of earlier non-deliverable forward contracts, which had previously been used to manage currency volatility. Those maturing positions have now created fresh demand for dollars in the market, offsetting the benefit of softer crude prices.
RBI Seen Intervening Through State Banks
Market participants said the RBI likely stepped in through state-run banks to support the rupee and prevent a sharper slide. The central bank has been using both spot market action and forward positions to manage extreme volatility in the currency. Similar pressure had also been seen in recent weeks when earlier intervention-linked contracts matured.
Oil Relief Fails To Fully Support Currency
Although oil prices slipped below the $100-per-barrel mark and helped improve sentiment in Indian stocks and bonds, the rupee remained under strain. Analysts pointed to outflows and strong dollar demand around the daily reference rate as the key reasons why the currency did not benefit as much as other domestic assets. The result is a market where lower oil has offered only limited support while structural dollar demand continues to weigh on the rupee.
