RBI Intervention Keeps Rupee Trapped in Tight Range

India's rupee is expected to remain in a tight range on Thursday, trading between 95.40 and 95.44 per dollar. The Reserve Bank of India (RBI) has been actively intervening in the market, especially when the pair approaches 95.60-95.80.

The RBI's actions have helped keep the rupee from rising above 96, capping volatility in the process. Brent crude prices have also fallen to around $87.30 a barrel, which is beneficial for India as it imports most of its oil and pays for it in dollars.

However, strong demand for dollars and renewed talk of a Federal Reserve rate hike next month may push the rupee lower. The dollar index has reached an eight-day high after US inflation data lifted expectations of a possible Fed hike.