Overview
- The rupee weakened through Thursday and touched a provisional low of 95.96 against the US dollar before recovering to about 95.85 in early trade on Friday.
- A sustained rise in Brent crude above $100 raised dollar demand from Indian oil importers and pushed the currency lower.
- A firmer US dollar and higher US Treasury yields reduced appetite for emerging-market assets and helped drive short-term currency moves.
- Domestic equity sell-offs pressured the rupee even as foreign institutional investors showed mixed flows, including a reported net purchase of stocks earlier in the week.
- Market participants say the Reserve Bank of India has the reserves and ability to intervene to smooth volatility and traders are watching oil, US data and any official RBI action for the next moves.