India's Central Bank Defends the Rupee Near 95 as Reserves Fall by Nearly $60 Billion From September's Record to $726 Billion
Mumbai — The Indian rupee was expected to open in a 94.92 to 94.98 range per dollar on Monday, having settled at 94.96 on Friday, according to Reuters. The rupee was likely to be under pressure from high oil prices at Monday's open, with the central bank's dollar sales expected to support the currency and keep it near what traders perceive to be the central bank's soft defence line.
The rupee has oscillated around the 95-per-dollar mark in recent sessions, briefly strengthening past the level before struggling to sustain it; subsequent declines past that level have repeatedly met resistance. The pattern suggests the Reserve Bank of India may be selling dollars to limit weakness past the 95 level, making it an important near-term support, a currency trader at a bank said. The rupee last week posted its best weekly performance in nearly four years, gaining about 2%, buoyed by the RBI's measures to support the currency and repeated dollar sales in the spot market. The RBI has made it costlier for importers to hedge future current-account payments, raised the cost for banks of buying foreign currency for certain transactions, and opened a dedicated window to supply state-run oil companies with dollars directly from its foreign-exchange reserves.
The central bank's stepped-up defence of the rupee, alongside sell/buy swaps, is reflected in foreign exchange reserves: the country's reserves have shed nearly $60 billion since hitting an all-time high in the first week of September, falling to $726 billion through October 9.
Oil remains a key pressure point. Brent crude briefly climbed above $110 a barrel on Friday for the first time since May; prices dipped on Monday to around $108 after US President Donald Trump waived new sanctions on Russia and tariffs on goods from Russia, potentially paving the way for increased Russian fuel exports. There is broad consensus among analysts and investors that the RBI's efforts to support the rupee will go only so far unless oil prices retreat.
(GSM, via Reuters)
Published by GSM · USA (original Chinese edition)
Photo: 图：印度2,000卢比纸币（资料图）。图片来源：Wikimedia Commons，Ravi Dwivedi 摄，CC BY-SA 4.0 授权 / Photo: An Indian 2,000-rupee banknote (file photo). Source: Wikimedia Commons, by Ravi Dwivedi, CC BY-SA 4.0.
