The Indian rupee edged higher against the dollar on Monday, buoyed by state-run bank dollar sales and ongoing RBI efforts, as traders await key inflation figures in India and the US amid geopolitical tensions and oil price fluctuations.
The Indian rupee edged higher on Monday, ending at 95.33 against the dollar as state-run banks sold dollars, most likely for the Reserve Bank of India, helping cap losses in a market still dominated by concern over Middle East tensions and the impact of firmer oil prices, traders said. The currency’s move was modest, but it extended a period in which the central bank has repeatedly stepped in to keep the rupee from revisiting the record lows seen earlier this year.
Traders said the market remained reluctant to build a strong position in either direction ahead of inflation data in India and the United States. A Reuters poll expects India’s July retail inflation to have risen to 4.5%, while analysts at BofA Global Research said core inflation is likely to stay below 3.8% even as services costs remain sticky. In the US, economists expect consumer prices to rise 0.1% in July after a 0.4% fall in June, a reading that could shape expectations for the Federal Reserve’s next move.
The rupee’s latest steadiness contrasts with the strain seen in recent months, when it sank to a record low of 95.08 in early May and briefly touched 95.33 on April 30 as crude prices surged and dollar demand intensified. More recently, it has also shown occasional resilience, including a July 10 rise to 95.33 helped by a weaker dollar, softer oil and stronger domestic equities, though gains have remained limited by persistent geopolitical risk and expectations of further US rate increases.
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