Rupee Defies Crude Price Rise as RBI Intervention Supports Currency

The Indian rupee has strengthened sharply over the past two trading sessions, despite a rise in crude oil prices. The rupee touched around 94.80 against the US dollar on Tuesday, gaining about a third of a percent in morning trade. This gain is significant, as it represents a 0.65% increase over two sessions.

The RBI's intervention in the foreign exchange market is contributing to the rupee's strength. The Reserve Bank of India has been selling dollars, increasing the availability of dollars in the market and reducing upward pressure on the US currency. This move has encouraged some traders to close their bets on a weaker rupee, which has added to the dollar supply in the market.

MSCI-related dollar inflows are also providing support for the rupee. Global investors adjust their portfolios when major stock market indices are rebalanced, and this process is creating demand for the Indian currency.