FX.co ★ Rupee Rises on Heavy RBI Intervention

The Indian rupee strengthened to approximately 89.9 per USD on Wednesday, marking a one-week high as it continued its upward trend from the previous session. This rise was largely attributed to the Reserve Bank of India's significant intervention to elevate the currency above the 90-mark threshold. The RBI employed a similar approach last year, taking decisive action to counter the rupee's downward trend and speculative long-dollar positions. Prior to this intervention, the rupee had declined by about 1% over the preceding two weeks. However, there remains an expectation that the rupee could edge back towards the 91 level due to ongoing pressure from persistent foreign divestment in Indian stocks and ongoing uncertainties surrounding a US–India trade agreement. US President Donald Trump cautioned on Sunday about the possibility of increased tariffs on Indian goods if New Delhi does not comply with Washington's demands to reduce Russian oil imports. In the meantime, investors are keenly awaiting the release of local inflation data scheduled for next week, as this will provide insights into the central bank's potential policy direction in February.