RBI Stabilizes Rupee at Critical 96-Per-Dollar Threshold

India's rupee briefly weakened to 96 per US dollar on Thursday before rebounding back to 95.90 after Reuters reported that state-run banks sold dollars for the Reserve Bank of India (RBI) to stabilize the exchange rate.

The sudden drop and subsequent recovery indicate how closely tied the currency is to global market forces, with higher US Treasury yields and a strong Federal Reserve contributing to the pressure on the rupee.

Reuters noted that several regional peers were also down 0.1%-0.4% on the day, citing MUFG's analysis that higher US yields can continue to put pressure on Asian currencies.