Traders expect continued weakness unless oil prices ease, with possible stronger intervention from the central bank if the rupee breaches key levels.
The Indian rupee fell to a
record closing low on Wednesday, pressured by rising oil prices
as efforts to end the Iran conflict remained stalled, while
persistent foreign selling of Indian assets added to the strain.
The rupee closed at 94.8450 per dollar, down 0.3%
on the day.
The currency has drifted back toward record lows as the
impact of central banks’ rupee supportive measures faded, with
concerns over India’s exposure to higher energy prices weighing
on sentiment.
Dollar sales by state-run banks, likely on behalf of the
RBI, helped limit losses, traders said.
Brent crude rose more than 3% to nearly $115 per barrel,
weighing on other oil-sensitive Asian currencies such as the
Philippine peso and Indonesian rupiah, both of which hit record
lows on Wednesday.
U.S. President Donald Trump has instructed aides to prepare
for an extended blockade of Iran, the Wall Street Journal
reported late on Tuesday, citing U.S. officials.
Analysts and traders expect the rupee to remain under strain
as long as oil prices remain elevated but a fall below 95 could
draw sterner interventions by the Reserve Bank of India.
“Around these levels last month the RBI had stepped in
heavily with both dollar sales and regulatory measures, at least
one of those could be used again,” a trader at a state-run bank
said.
Global markets, meanwhile, are also awaiting the U.S.
Federal Reserve’s policy decision. No change in benchmark rates
is expected but investors will pay close attention to commentary
on how the Iran war will impact the world’s largest economy.
“We think it makes sense to brace for a higher-for-longer
rates world, amidst what looks to be higher-for-longer
inflation,” analysts at DBS said in a note.
Fed funds futures are pricing in no policy changes by the
Fed until late in 2027, according to the CME Group’s FedWatch
tool.
Published on April 29, 2026
