The Indian rupee opened marginally stronger at 94.93 against the US dollar on October 26, as high oil prices threatened its recovery. The currency gained just one paisa from Friday’s close of 94.94, while fading foreign inflows and global uncertainty limited further gains.
Traders are watching the 95-per-dollar level as the Reserve Bank of India (RBI) works to curb excessive volatility. The rupee traded between 94.32 and 94.97 last week, supported by inflows linked to the Jio Platforms IPO.
However, that support could weaken as allotment concludes ahead of the company’s scheduled stock market listing on Wednesday. Brent crude near USD 115 per barrel, persistent dollar demand and the US Federal Reserve’s upcoming policy decision now shape the currency’s outlook.
Expensive crude oil remains a major risk for the Indian rupee, given India’s reliance on imported energy. Rising oil prices increase the country’s import bill and can widen its trade deficit. Supply concerns and geopolitical tensions have also pushed Brent crude higher, adding uncertainty to currency markets.
Higher energy costs can prompt businesses to secure dollars against future payments, adding pressure to the rupee. The RBI’s special foreign exchange arrangements for state-run oil companies can reduce their immediate demand in the open market. However, those measures cannot remove the broader impact of costly oil on India’s external finances.
The RBI has used foreign exchange measures to manage volatility and discourage speculative positions. Its intervention can help smooth sharp currency movements, although it cannot fully offset sustained external pressures. Market participants will also track the Federal Reserve’s policy decision for signals about future US interest rates.
A cautious Fed outlook could support the dollar and complicate recovery across emerging market currencies. Meanwhile, the fading Jio Platforms IPO inflows may leave the rupee with less near-term support. Traders will watch whether the currency can hold near 95 per dollar as oil prices and global monetary signals drive sentiment.
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