Rupee Slides as Oil Surges and RBI Eases Intervention

India's rupee slipped 0.3% to 95.44 per US dollar on Thursday, hurt by rising oil prices and a perceived reduction in Reserve Bank of India (RBI) intervention.

Oil prices have surged more than 6% this week, making it harder for India to manage its large import bills.

Traders noted that the RBI's activity in the foreign exchange market has decreased compared to last week, when it intervened heavily to keep the exchange rate above 95 per dollar.

The central bank has shifted towards using dollar-rupee sell/buy swaps, which can have a greater impact on forward pricing. The one-year annualized implied forward rate rose almost 30 basis points in two days to 3.37%, the highest since late May.