Rupee traders test RBI's tolerance for measured depreciation

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SENSEX 73,447.16

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NIFTY 22,740.45

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CRUDEOIL 9,622.00

 -101.00

GOLD 142,567.00

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Continued pressure from high oil prices and equity outflows could result in RBI allowing a controlled drop in the rupee, say market players

By Reuters

Updated - October 27, 2026 at 11:38 AM. | MUMBAI, Oct 27

The RBI has spent around $80 ⁠billion to bolster the rupee since June. | Photo Credit: Prathmesh Kher _12003

The ​rupee slipped marginally on Tuesday on weak underlying sentiment ‌with traders testing the Reserve Bank of India's ​tolerance for measured depreciation.

The rupee ⁠was quoting at 95.22 per US dollar at 10:25 a.m. IST, down from 95.1850 on Monday.

Persistent ‌external pressures from high oil prices and equity outflows are leaving the ‌currency reliant on RBI intervention for support, ‌traders ⁠said. The central bank has spent around $80 ⁠billion to bolster the local currency since June.

High crude oil prices, hovering near a six-month peak, are pushing importers ​to increase hedging, ‌while adding to concerns over India's economic outlook. They are further weighing on foreign portfolio inflows. Foreign investors have withdrawn nearly $5 billion from Indian ‌equities in October.

The key question reflected ​in the way the market is moving is whether the RBI is now ⁠more willing to allow a measured decline in the local currency, a currency trader ‌at a private sector bank said.

With oil prices at this level and underlying pressures on the rupee persisting, the trader said the "odds are shifting in favour of RBI allowing a controlled drop."

The RBI's intervention alongside measures ‌it took to discourage dollar buying proved instrumental in ​driving the rupee's recovery from levels near 97 per dollar earlier this month, when ⁠the currency threatened to breach that mark ⁠for the first time.

The rupee's decline past 95 on Monday, followed by a ‌further drop on Tuesday, has prompted traders to reassess how much depreciation the RBI ​is willing to tolerate.

Published on October 27, 2026

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