Rupee nears record low as RBI intervenes but oil, risk aversion weigh

The Indian rupee is under renewed pressure and is expected to weaken further toward 96.40-96.44 per dollar, just shy of its record low of 96.96. The RBI is intervening nearly daily in spot and forward markets, but traders describe its defense as measured rather than aggressive. The decline is being driven more by elevated oil prices and risk aversion linked to Middle East tensions than by capital flight, even though portfolio flows have improved. Foreign investors have bought about $1.5 billion of Indian equities this month and around $500 million of debt, yet the currency still struggles. Market participants will be watching whether rising crude and continued risk-off sentiment force the RBI into a stronger intervention stance.