Rupee Hits Record Low, RBI Steps In

The Indian rupee fell to a record low of 94.90 against the US dollar on Thursday, touching an intraday low of 95.33 before recovering. The Reserve Bank of India stepped in to sell dollars, which helped pull the currency back from its worst levels. The RBI appears focused on defending the 95-per-dollar level as a key threshold. The rupee's slide comes as crude oil prices crossed $125 per barrel, a significant pressure point for India, which imports roughly 85% of its oil needs. Higher oil prices widen the current account deficit, the gap between what India earns and spends in foreign exchange, and add to import costs across the economy. RBI intervention provides short-term support but draws down foreign exchange reserves. If oil stays elevated, the pressure on the rupee is likely to persist. Watch whether the RBI can hold the 95 level and how sustained crude prices above $125 affect inflation and the trade balance in the weeks ahead.