India rupee likely to weaken at open; durability of RBI support hinges on oil

The Indian rupee is likely to open weaker on Friday. The previous day saw a rally mainly due to possible intervention by the Reserve Bank of India. However, traders express doubts about the sustainability of this support. The rupee’s strength remains closely linked to oil prices. Rising oil costs add pressure to the currency. Therefore, unless oil prices ease, the RBI’s efforts might not sustain the rupee’s gains. In addition, broader market factors also influence currency movements. Meanwhile, the RBI’s actions highlight its active role in managing forex volatility. As a result, the rupee’s near-term performance depends on multiple external and domestic factors.