Indian rupee may withstand oil, Fed pressures with RBI support

MUMBAI: The Indian rupee is poised for a muted opening on Monday, with the central bank’s recent aggressive presence likely to temper ​the impact of higher crude prices and the increased likelihood of ‌a US Federal Reserve rate hike next week. The Indian rupee is expected to open in the 94. 46-94. 50 range, per traders, having settled at 94. 4850 to the dollar on Friday. The rupee’s near 1% ​jump last week has taken some of the bearishness out of ​the market, with the Reserve Bank of India’s sustained presence helping ⁠absorb the impact of costlier oil and a more hawkish Fed ​outlook, traders said. The RBI has shifted the tone for the rupee, a currency ​trader at a bank said. The focus now is on whether the central bank remains this active and provides the currency enough support to sustain or to extend the ​move, he said. The rupee will need the help of the RBI to begin the week ​with oil prices extending last week’s rally and the U. S. jobs data on Friday making ‌it ⁠more likely that the Fed will raise interest rates at its September 15-16 meeting. Tit-for-tat strikes between the U. S. and Iran on vessels sailing in the Strait of Hormuz and other areas heightened concerns of a prolonged supply disruption from the ​Middle East, lifting ​Brent crude to $97 ⁠a barrel. Meanwhile, U. S. nonfarm payrolls surged by 162, 000 jobs last month, outpacing expectations of economists, who had forecast ​they would increase by 56, 000. Adding to the robust ​picture, a ⁠previously reported drop of 23, 000 for July was replaced by a 21, 000 addition for that month. “With Fed Chair Kevin Warsh describing the US at full ⁠employment, this ​outcome has nudged expectations of a September ​rate hike higher, ” ING Bank said in a note on Friday. However, the final decision hangs ​on Friday’s inflation print, it said.

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