The Indian rupee firmed to around 91.7 per dollar, rebounding from a record low in the previous session as the Reserve Bank of India intensified efforts to stabilize financial markets amid heightened volatility in global oil prices. The central bank has been intervening in both offshore and onshore foreign-exchange markets, stepping in after the rupee briefly slipped beyond the 92-per-dollar mark during the recent bout of turbulence.
Economists caution that persistently elevated energy prices could weigh on India’s external balances, widening the trade deficit and increasing pressure on the currency. Market sentiment improved nonetheless, bolstered by the RBI’s continued presence in FX markets, with estimates indicating it may have sold $18 billion–$20 billion last week alone. The central bank has also employed buy-sell swaps to replenish liquidity and reinforce overall market stability.
