Rupee edges up against dollar as RBI support offsets oil price pressures

The rupee strengthened by 1 paisa to 95.73 against the US dollar during early trade on Wednesday, according to forex dealers tracking the interbank foreign exchange market. The currency opened at 95.72 before easing slightly to close at 95.73, marking a modest recovery from Tuesday's close of 95.74.

The Reserve Bank of India's continued intervention in the foreign exchange market provided critical support to the rupee, even as global crude oil prices remained elevated above USD 91 per barrel. Oil marketing companies' bids for dollars to fund imports helped stabilise the currency, traders noted. A decline in the US dollar index and continued inflows from foreign institutional investors also lent support to the rupee.

"The rupee has demonstrated reasonable resilience despite the oil shock, largely due to suspected sustained RBI intervention," said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. "Range-bound trading persists as bids emerge from oil companies managing their import requirements."

Geopolitical tensions in West Asia continued to underpin crude oil prices, keeping global markets volatile. Analysts said the rupee's performance would likely remain dependent on the central bank's support levels and movement in global oil prices in the coming sessions.