The Indian rupee hovered close to its record low on Monday as global investors remained cautious over potential disruptions to energy supplies caused by the ongoing Iran conflict. Support from the Reserve Bank of India (RBI) through likely dollar sales helped prevent the currency from weakening further.
By 10:45 a.m. IST, the rupee was trading at 92.4650 per dollar, just slightly above its all-time low of 92.4750 recorded last week. The currency showed little movement during Monday’s trading session, with market participants indicating that state-owned banks were selling dollars, likely acting on behalf of the RBI to stabilize the market.
Since the Iran conflict began, the central bank has reportedly intervened frequently to reduce pressure on the rupee. These actions have helped limit losses despite rising global oil prices and continued foreign investor withdrawals from Indian equities.
Foreign investors have already withdrawn more than $5.5 billion from Indian stocks in March. Meanwhile, India’s benchmark Nifty 50 index fell by about 0.4% on Monday.
According to Anil Bhansali, Head of Treasury at Finrex Treasury Advisors, the RBI is expected to continue selling dollars to support the currency. However, pressure on the rupee may remain due to portfolio outflows and strong demand for dollars from corporations.
Bhansali advised exporters to take advantage of higher dollar rates during the day, while importers may benefit from buying during dips created by the RBI’s interventions.
Across Asia, currencies showed mixed performance, while the U.S. dollar index remained near 100 as investors sought safe-haven assets amid escalating tensions in the Middle East.
Market attention is also turning to several upcoming central bank decisions this week. The U.S. Federal Reserve is scheduled to announce its policy decision on Wednesday, with expectations that interest rates will remain unchanged while officials assess risks linked to the Middle East conflict.
