The Indian rupee steadied around 94.4 per dollar, hovering near more than two-month highs as strong dollar inflows and RBI intervention continued to support the currency. Inflows mobilised through the central bank's one-off measures topped $136 billion, far exceeding market expectations and strengthening the RBI's ability to support the rupee. Broad-based dollar weakness, led by gains in the Japanese yen, also provided support as markets increased bets on a Bank of Japan rate hike. However, rising oil prices remained a key headwind, with Brent crude climbing above $96 a barrel on renewed US-Iran hostilities. Higher oil prices have pushed up US Treasury yields and boosted expectations of a Fed rate hike this month, limiting the rupee’s upside. The currency has gained more than 1% this week, ranking among Asia’s best performers, though elevated crude prices could limit further gains
Global uncertainty has weighed generally on emerging market currencies, while the U.S. dollar looks set to maintain a holding pattern against most currencies in the coming months, analysts say.
