Rupee slides to weekly low as crude rally stokes rate hike concerns

The rupee extended losses to touch a one-week low against the dollar on Tuesday, dragged down by an international crude oil rally that has amplified expectations of further interest rate increases globally. The currency's downside remained checked, however, by timely dollar sales orchestrated through state-run banks, widely understood to be coordinated by the Reserve Bank of India to defend the rupee. The intervention proved effective in keeping the currency from breaching the 96 per dollar mark, where it has faced selling pressure. Rising crude prices typically weigh on the rupee by widening India's current account deficit and increasing the import bill. More significantly, elevated global energy costs have prompted central banks worldwide to signal a hawkish stance on monetary policy, a shift that supports the dollar and pressures emerging market currencies including the rupee. Market participants are closely monitoring crude oil trajectory and any signals from the RBI on its policy stance, with both factors set to influence rupee movement in the near term.