Rupee breaches 95-mark as oil surge pressures currency

The rupee touched an intraday low of 95.23 against the US dollar before recovering slightly to settle at 95.11, marking fresh weakness in the domestic currency as global oil prices surged. Brent crude climbed past the $100-per-barrel mark, intensifying pressure on the rupee through elevated import costs and wider current account concerns.

Reserve Bank of India officials intervened in both spot and forward markets to cushion the rupee's decline, dealers said. The central bank's actions, though measured, signalled its commitment to preventing excessive depreciation at a time when imported inflation already weighs on price growth.

The currency's slide reflects a combination of domestic and external headwinds. Rising crude prices inflate India's energy import bill, while global rate expectations and capital flow dynamics continue to favour stronger dollar assets. Analysts noted that the rupee's movement through the 95-level represents a critical psychological barrier for policymakers monitoring exchange rate stability.

The RBI's intervention strategy, combining spot sales with swap market operations, aims to manage volatility without exhausting foreign exchange reserves. Market participants will watch crude oil trends and RBI communication closely for signals on how aggressively the central bank intends to defend the rupee in coming sessions.