Rupee Hits New Low Amid Oil Price Surge

The Indian rupee hit its weakest point in over a week as oil prices surged nearly 4% to $108.2 per barrel, causing investors to fret about high energy costs and geopolitical uncertainty.

As Brent crude rose sharply, the rupee slipped to 95.9825 per dollar, down 0.2% from the previous day's close.

The Reserve Bank of India (RBI) intervened by selling dollars from state-run banks, helping to curb losses and maintain the rupee within a tight range of 94-97.

However, investors remain cautious, with several analysts at Goldman Sachs noting that many investors have an outright bearish view on Emerging Market Asia high-yield currencies, including the Philippine peso (PHP), Indonesian rupiah (IDR), and Indian rupee (INR), due to their vulnerability to higher energy costs.

The RBI has a significant arsenal of capital inflows at its disposal, drawn in $143.6 billion between June 8 and September 18 through policy measures, which it can use to defend the rupee.