Mumbai, Aug 25: The Indian rupee came under mild pressure against the US dollar in early trading on Tuesday as higher crude oil prices and increased demand for dollars from importers weighed on the currency.
The rupee opened at 95.74 per US dollar, weakening by 4 paise from Monday’s close of 95.70. The currency has remained largely range-bound in recent weeks as traders assess global market conditions, oil prices and central bank intervention.
Market participants said continued intervention by the Reserve Bank of India (RBI) has helped prevent a sharper decline in the rupee. Dollar buying by oil companies and other importers has provided support to the US currency, while RBI operations have helped contain excessive volatility.
The rupee is currently trading within a narrow range, with the 95.50-96.00 per dollar zone emerging as an important near-term range for the currency. Traders are expected to closely monitor oil prices and RBI activity for further direction.
The dollar index stood at 99.04, slightly higher amid demand for safe-haven assets following renewed geopolitical concerns linked to Iran. However, expectations surrounding US Treasury bond buybacks have limited broader gains in the dollar.
Crude oil remains a key factor for the Indian currency. Brent crude futures were up 0.30 per cent at $92.45 a barrel, raising concerns over India’s import costs and demand for dollars.
A sustained rise in oil prices could put additional pressure on the rupee by increasing the country’s import bill. On the other hand, continued RBI intervention and stable foreign exchange flows could help limit sharp movements.
Traders are expected to watch crude oil prices, the dollar index, geopolitical developments, foreign fund flows and RBI intervention for cues during the session.
For now, the rupee remains largely range-bound, with market participants expecting cautious trading amid elevated global uncertainty.
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