Traders keep focus on oil prices, RBI moves as rupee treads water
May 27, 2026
The Indian rupee remained stable on Wednesday, supported by central bank intervention in spot and forward markets. Dollar sales from state-run banks prevented a significant fall, while forward premiums cooled due to swaps. A slump in crude oil prices also provided some relief to the rupee.
Synopsis
The Indian rupee remained stable on Wednesday, supported by central bank intervention in spot and forward markets. Dollar sales from state-run banks prevented a significant fall, while forward premiums cooled due to swaps. A slump in crude oil prices also provided some relief to the rupee.
The Indian rupee had a muted Wednesday, with traders keeping an eye on gyrations in oil prices alongside signs of the central bank's presence in the spot and forward market to support the beleaguered currency.
The rupee closed at 95.69 per dollar, barely changed from its close at 95.68 in the previous session.
While the currency threatened to fall past 95.80 earlier in the session, dollar sales from state-run banks averted the move, four traders said.
Concurrently, state-run banks were spotted conducting dollar-rupee buy/sell swaps, which cooled forward premiums, they added.
India's central bank has likely been rolling over maturities of forwards to tenors of more than one year via swaps over the last few days, a trader at a private bank said.
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The 2-year dollar-rupee forward premium was last down 9 paisa at 5.83 rupees.
Meanwhile, a slump in crude oil prices gave the rupee some breathing room as well.
Brent was down more than 3% at $96.5 per barrel as traders sought clarity on negotiations between Iran and the U.S. after renewed hostilities set back efforts to end the war and reopen the Strait of Hormuz.
The three-month-old conflict has hit oil-importing Asian economies especially hard, with the Indian rupee, Indonesian rupiah and Philippine peso becoming regional laggards.
Higher oil prices present both inflation and growth risks to these economies.
"We forecast a further 100bp of hikes in Philippines, and 50bp each in Indonesia and India, given high imported energy needs, fiscal policy concerns, current account deficits, and relatively high FX sensitivity," analysts at Goldman Sachs said in a note.
Philippines is considering an off-cycle rate hike while the Reserve Bank of India is slated to announce its policy decision on June 5.
India's financial markets will be closed on Thursday.
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The Indian rupee remained stable on Wednesday, supported by central bank intervention in spot and forward markets. Dollar sales from state-run banks prevented a significant fall, while forward premiums cooled due to swaps. A slump in crude oil prices also provided some relief to the rupee.
The Indian rupee had a muted Wednesday, with traders keeping an eye on gyrations in oil prices alongside signs of the central bank's presence in the spot and forward market to support the beleaguered currency.
The rupee closed at 95.69 per dollar, barely changed from its close at 95.68 in the previous session.
While the currency threatened to fall past 95.80 earlier in the session, dollar sales from state-run banks averted the move, four traders said.
Concurrently, state-run banks were spotted conducting dollar-rupee buy/sell swaps, which cooled forward premiums, they added.
India's central bank has likely been rolling over maturities of forwards to tenors of more than one year via swaps over the last few days, a trader at a private bank said.
Live Events
The 2-year dollar-rupee forward premium was last down 9 paisa at 5.83 rupees.
Meanwhile, a slump in crude oil prices gave the rupee some breathing room as well.
Brent was down more than 3% at $96.5 per barrel as traders sought clarity on negotiations between Iran and the U.S. after renewed hostilities set back efforts to end the war and reopen the Strait of Hormuz.
The three-month-old conflict has hit oil-importing Asian economies especially hard, with the Indian rupee, Indonesian rupiah and Philippine peso becoming regional laggards.
Higher oil prices present both inflation and growth risks to these economies.
"We forecast a further 100bp of hikes in Philippines, and 50bp each in Indonesia and India, given high imported energy needs, fiscal policy concerns, current account deficits, and relatively high FX sensitivity," analysts at Goldman Sachs said in a note.
Philippines is considering an off-cycle rate hike while the Reserve Bank of India is slated to announce its policy decision on June 5.
India's financial markets will be closed on Thursday.
(You can now subscribe to our ETMarkets WhatsApp channel)
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...moreless
(You can now subscribe to our ETMarkets WhatsApp channel)
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...moreless
Down 30% in 1 year, are AI-hit Infy, TCS still value stocks?
How practical is India’s latest investor protection framework?
3 years on, India rebuilds aircraft lessors’ trust that Go First broke
Can a Rajan-style NRI dollar-deposit scheme save the rupee?
As West Asia boils, will Dubai’s loss be a GIFT for India?
Stock Radar: SAIL stock hits fresh record high in May; time to buy or book profits?
1
2
3