The Reserve Bank of India appears to have extended intervention in the foreign-exchange market as the rupee came under renewed pressure from elevated oil prices. Traders reported dollar sales by State-run banks, a common channel through which the central bank is believed to smooth sharp currency moves.
India does not operate a fixed exchange rate. The RBI generally allows the rupee to move with market conditions while intervening to contain disorderly volatility. Higher crude prices can weaken the currency because India is a major net oil importer, increasing demand for dollars and adding to inflation risks.