Rupee Steady Amidst Oil Price Swings & RBI Support

As of May 27, 2026, the Indian rupee exhibited a stable performance, closing at 95.69 against the US dollar. Market participants closely monitored global oil price fluctuations and the Reserve Bank of India's (RBI) interventions in both spot and forward currency markets.

Traders reported that state-run banks actively sold dollars, preventing the rupee from depreciating beyond 95.80. These banks were also observed conducting dollar-rupee buy/sell swaps, which helped reduce forward premiums. This suggests the RBI may have been extending forward contract maturities to support the currency.

The rupee received some support from a slump in crude oil prices. Brent crude prices dropped by over 3%, influenced by ongoing negotiations regarding Iran and the US. This decline in oil prices offered a temporary reprieve to the rupee and other regional currencies, such as the Indonesian rupiah and Philippine peso, which have been significantly affected by rising oil costs.

Analysts noted that higher oil prices pose inflation and growth risks for oil-importing nations. Goldman Sachs analysts forecasted interest rate hikes in the Philippines, Indonesia, and India due to high energy import costs, fiscal concerns, current account deficits, and currency sensitivity.

The Philippines is considering an unscheduled rate hike, while the RBI is scheduled to announce its monetary policy decision on June 5. Indian financial markets were to be closed on Thursday, May 28, 2026.