Rupee Steady at 95.2 as RBI Steps In to Cap Oil Risk

The Indian rupee held its ground around 95.2 against the US dollar on Monday, August 10, 2026, as the Reserve Bank of India continued to flex its muscle in the foreign exchange market. The currency settled at 95.2075 on Friday and was expected to open in the 95.14 to 95.16 range, according to traders, before the USD/INR edged up 0.11% to 95.2470 during the session.

The rupee's resilience comes despite a rise in oil prices and lingering uncertainty over the Strait of Hormuz. Two forces are working in the currency's favour: the RBI's visible presence in the market and a sharp pullback in expectations that the US Federal Reserve will raise rates next month.

RBI Draws a Line in the Sand

The central bank intervened at the open on Friday, August 7, making clear it would not allow oil-price volatility to translate into unchecked pressure on the rupee. A currency trader at a bank told Reuters that the RBI's willingness to step in at current levels signals it wants to push the dollar/rupee lower.

The rupee has now been in recovery mode for two weeks, buoyed by regular RBI intervention. Over the past month, the currency has strengthened 0.67%, though it remains down 8.65% over the last 12 months. The USD/INR hit an all-time high of 99.82 in March 2026, a level that now looks distant.

Oil Prices: Manageable for Now

Brent crude rose to around $84.50 a barrel on Monday, but that is well below its recent peak of $100, giving the rupee breathing room. The rise was partly driven by uncertainty over the reopening of the Strait of Hormuz, with Iran saying an agreement with Oman on new shipping lanes was close to completion while Washington still needed to meet other conditions set by Tehran.

For India, a major oil importer, crude prices are a direct pipeline to currency pressure. The RBI's strategy appears to be to absorb that pressure at the open rather than let it cascade through the trading day.

US Jobs Shock Cools Fed Hike Bets

Across the Pacific, a surprise US employment report has reshaped rate expectations. Employers unexpectedly shed 23,000 jobs in July, a sharp miss against the 80,000 jobs economists had forecast. Fed funds futures now imply a 44% probability of a rate hike at the September meeting, down from 55% before the data.

That repricing has eased some upward pressure on the dollar, indirectly supporting emerging-market currencies including the rupee. According to Trading Economics global macro models, the rupee is expected to trade at 94.86 by the end of the third quarter and strengthen further to 93.28 over the next 12 months.

What Comes Next

The RBI's posture suggests it will remain an active force in the market. With the Strait of Hormuz situation unresolved and US monetary policy still in flux, the rupee's path will depend on how long the central bank can sustain its backstop and whether oil prices stay below the danger zone.