The Indian rupee was little changed on Monday despite weakness among most of its Asian peers as likely U.S. dollar sales from the Reserve Bank of India (RBI) supported the local unit in the face of rising oil prices.
The rupee was at 83.2550 against the U.S. dollar as of 10:45 a.m. IST compared with its close of 83.2625 in the previous session. The rupee was held in a narrow range between 83.25 and 83.2650 during early trading on Monday.
The RBI was likely selling U.S. dollars near the 83.25 level, a foreign exchange trader at a state-run bank said. "It's the same as last week."
The RBI had likely intervened on Friday as well to prevent the rupee from sliding towards its record low.
The central bank was also likely active in the non-deliverable forwards market before Monday's spot trading session began, a foreign exchange trader at a private bank said.
Brent crude oil futures climbed over 6% on Friday and were last quoted higher at $90.92, led higher on concerns about an escalation in the ongoing military conflict in the Middle East.
For every $10 climb in oil prices, India's current account deficit as a percentage of GDP stands to widen by ~35-40bps, DBS Bank stated in a note.
The rupee is likely to see "another lacklustre day in the first half but some action might be seen (in the) second half," said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
