RBI Intervention-Driven Gains Fading for Indian Rupee

The Indian Rupee's recent gains against the US Dollar are fading as the currency is being driven by RBI interventions rather than fundamentals. The rupee has been rising despite an increase in oil prices and a relatively stable dollar, which may be attributed to the central bank's efforts to stabilize the market.

However, these intervention-driven moves rarely last without a change in fundamentals. Oil prices have been steadily increasing, and there is a risk of a hot CPI report on the horizon, both of which are negative drivers for the rupee.

In the short-term, the INR will continue to be driven by oil prices and the hawkish/dovish repricing in Fed interest rate expectations. Therefore, the pair may keep trading in a wide range until the US and Iran find an agreement and the Strait of Hormuz is reopened.