On March 11, the rupee fell 14 paise at the opening, as sentiment was affected by volatile Brent crude and ongoing foreign-fund outflows. The Reserve Bank of India’s (RBI) aggressive dollar-selling strategy keeps the currency anchored and keeps it from falling below the 92 level.
After closing the previous session at Rs 91.81, the rupee was now trading at Rs 91.93 versus the dollar. Intraday, it fell to Rs 92.19 but recovered to close below the 92 mark.
Following rumors that the International Energy Agency (IEA) has proposed the largest release of oil reserves in its history, the benchmark Brent crude was trading below $100 per barrel after a massive surge.
High oil prices continue to put pressure on the rupee, and more supply interruptions are anticipated as Iran continues to shut the Strait of Hormuz. The RBI has regularly intervened in the markets by selling the US dollar in order to stop the rupee from depreciating sharply.
The RBI has made sure that the level of 92 is not exceeded, at least for the time being, because it is obviously unhappy with the rupee declining once more. Despite frequent outflows, the RBI has recently effectively contained the rupee despite its continued susceptibility to oil shocks and FPI selling.
