The Indian rupee has recovered slightly against the dollar following Monday’s sell-off. This is coming after a slight retreat by the greenback from a new two-decade high amid calls for intervention by the RBI.
The latest data from Bloomberg shows that the rupee is trading at 79.8862 per dollar, a slight change from its previous close of 79.9675. During early Asia trading sessions on Tuesday, the rupee reportedly gained four paise against the greenback. While the rupee is still under pressure against the dollar, it has regained some lost ground after coming under strong sell pressure on Monday.
Even though the Indian rupee registered a new all-time low of 80.15 during the previous trading session, it has now breached the significant 80 per dollar level, even as the Reserve Bank of India struggled to defend the currency from a further drop.
The dollar index, which has continued to boss the market for many months now, retreated from its overnight highs of 109.48 and is currently trading at 108.65 during the Asian session.
While a dominant dollar has continued to put pressure on the rupee, another factor contributing to the rupee’s poor performance against the rupee is rising crude oil prices.
The RBI’s attempt to defend the rupee
The rupee has continued to trail the dollar for much of the year, and analysts are worried that if nothing is done, the rupee may be pressured into unseen territories. It is especially true if the Fed continues on its aggressive policy path as it manages rising inflation.
Despite calls to defend the rupee from further fall, the RBI hasn’t made any concrete move and is said to be studying how the currency performs in the next coming days.
Elsewhere, oil has continued to push upward, following a decent performance on Monday amid rumors of a possible OPEC+ output cut and supply concerns. As of the time of putting together this report, Brent crude is trading at 104.50 per barrel, a decent recovery from last week’s low of $91.50.