RBI Defends Rupee as Oil Prices Rise, Traders Wait for Intervention

The Reserve Bank of India (RBI) has been defending the rupee against the dollar at around 95.45, and traders are watching closely to see how aggressively it will intervene in case of further pressure on the currency.

The RBI sold dollars every day last week to keep the rupee within a narrow band between 95.17 and 95.45, but rising crude oil prices could add more pressure on the rupee as importers and oil companies demand more dollars.

Anil Bhansali, head of treasury at Finrex Treasury Advisors, expects the RBI to intervene again, saying 'I expect the RBI to come in. Last week, it did not let the rupee cross 95.45, so we will all be in a wait-and-watch mode Monday morning.'

Brent crude futures have climbed nearly 6% in a week amid the West Asia crisis, and oil prices could harden further in the coming weeks.