The Indian rupee remained under pressure around 95.30 to the US dollar on September 10 as elevated crude prices increased demand for foreign currency from importers. Reuters reported dollar sales by state-run banks, which traders often associate with Reserve Bank of India efforts to smooth volatility.
The important policy point is that India does not operate a fixed exchange rate. The RBI can intervene in the foreign-exchange market to reduce disorderly moves, but it cannot permanently offset a large and sustained shift in fundamentals without costs.
Oil matters because Indian refiners and other importers need dollars to pay overseas suppliers. When crude becomes more expensive, that demand rises, while a weaker rupee can in turn make imported commodities costlier in domestic currency. That creates a feedback loop between energy prices, inflation and the external sector.