BusinessThe rupee has slipped past 95 to the dollar as oil tests the RBI’s defence
Rising crude prices and persistent dollar demand pushed the currency weaker despite recent intervention by the Reserve Bank of India.
THE INDIQA Research DeskPublished 9 Sept 2026Updated 12 Sept 20262 min read
The Indian rupee weakened past 95 per US dollar on September 9 as Brent crude approached $100 and demand for dollars remained firm. Reuters reported that the RBI had intervened repeatedly in recent sessions, but the latest pressure was strong enough to reverse part of that support.
For UPSC, the episode is a useful example of the limits of currency intervention. A central bank can smooth volatility by buying or selling foreign exchange, but it cannot indefinitely offset a sustained external shock. Oil prices, capital flows, trade balances, inflation expectations and interest-rate differentials all influence the exchange rate.
CIVIL SERVICES VIEWStudy this development
GS-IIIExchange rate, forex reserves and monetary managementPrelims: HighMains: High
Why this matters
Rising crude prices and persistent dollar demand pushed the currency weaker despite recent intervention by the Reserve Bank of India.
Key facts
- The RBI can intervene in the foreign-exchange market to smooth excessive volatility.
Key terms
- Rupee
- RBI intervention
- forex reserves
- exchange rate
Arguments, challenges and policy responses
- Limits of exchange-rate intervention
- Relationship between oil imports and currency pressure
India’s context
The move highlights India’s sensitivity to imported energy prices and dollar demand.
Practice question
Why can foreign-exchange intervention smooth volatility without permanently fixing the market value of a currency?
Revision summary
- The RBI can intervene in the foreign-exchange market to smooth excessive volatility.
- Limits of exchange-rate intervention
- Relationship between oil imports and currency pressure
DISCUSSION & EDITORIAL REVIEW
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