Rupee ended little changed on Wednesday after moving in a narrow range, as continued support from the Reserve Bank of India offset rising dollar demand from importers and the impact of a spike in oil prices and Treasury yields.
The rupee opened at 94.89 against the U.S. dollar and briefly moved higher, before trading around the previous day’s close for most of the session. The currency ended at 94.97, after having settled at 94.95 on Tuesday.
The RBI likely stepped in with dollar sales before the market opened and remained present to curb any major volatility in the currency, traders said.
The central bank has stepped up its support for the rupee in recent sessions, armed with a flood of deposits from non-residents that have helped it shield the local currency from a surge in oil prices and rising U.S. Treasury yields.
“I think the FCNR scheme achieved its intended objective of supporting external funding environment and stabilizing the rupee,” said Krishna Bhimavarapu, APAC economist at State Street Investment Management.
“The FCNR flows may have eventually exceeded $100 billion.”
Renewed military escalation between the U.S. and Iran rattled markets, sending benchmark Brent crude to as high as $97 per barrel, with traders pricing in a higher risk of supply disruption.
Market participants had expected the newsflow to pressure the rupee, but RBI intervention helped prevent any major decline.
The jump in oil prices also fanned inflation concerns, driving U.S. Treasury yields higher. The yield on the 10-year note hit its highest level in almost three years.
In the past two days, RBI dollar sales as well as inflows routed through foreign banks have helped lift the currency despite the twin headwinds.
The RBI has been supplying dollars to curb volatility and the rupee will likely remain in the 94.50-95.50 range as long as Brent crude stays below $100 a barrel, said Alok Singh, head of treasury at CSB Bank in Mumbai.
Published on September 2, 2026
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