The Indian rupee closed the week
with losses against the dollar, with frequent dollar-selling
interventions by the central bank curbing declines from the
prolonged uncertainty from the months-long West Asia conflict.
The rupee ended little changed at 95.4250 per on
Friday but fell 0.2 per cent from a week ago.
Persistent dollar sales by State-run banks, most likely on
behalf of the Reserve Bank of India, anchored the currency in a
less-than-30-paisa range during the week, and blunted the impact
of sustained dollar demand from importers, volatile crude prices
and the maturity of derivative contracts.
Oil prices rose after the United States threatened an
indefinite naval blockade of Iran, reviving concerns about the
supply of crude. India is particularly vulnerable to such supply
disruptions as it imports about 90 per cent of its oil.
Data on Friday showed that India’s wholesale price inflation
rose 9.78 per cent year-on-year in July, easing marginally from June due
to lower energy inflation. Earlier in the week, the consumer
price gauge for July was reported at 4.45 per cent, modestly higher than
the central bank’s 4 per cent medium-term target.
“As increases in inflation continue to be driven by food and
administered price increases, we expect the MPC (monetary policy
committee) to look through these higher inflation outcomes and
persist with a pause for the remainder of 2026,” economists at
Barclays said in a note.
The lender expects 50 basis points of hikes in the first
half of 2027.
Elsewhere, regional currencies and stocks were trading mixed
while the dollar index slipped 0.2 per cent to 99.7.
The yen was a touch stronger after Reuters reported, citing
sources, that the Bank of Japan is set to raise interest rates
as soon as September and is considering hiking more aggressively
thereafter.
Published on August 14, 2026
