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Indian rupee gains slightly against US dollar, but rising crude oil prices and importer demand create pressure. RBI intervenes to limit decline.
By Anshul August 12, 2026, 9:18:42 AM IST (Published)
2 Min Read
The Indian rupee opened marginally higher against the US dollar on Wednesday (August 12), gaining 4 paise from the previous close, as rising crude oil prices and importer dollar demand continued to weigh on the currency.
The rupee opened at 95.40 per dollar, compared with Tuesday’s (August 11's) close of 95.44. Despite the marginal recovery at the open, the currency remains under pressure after slipping below the 95-per-dollar mark last week.
Oil prices remain a key pressure point
Brent crude is nearing $90 a barrel, with oil prices rising amid continued uncertainty around the US-Iran conflict and risks to energy supplies. Brent has gained around 7% this week, according to Reuters.
Higher crude prices matter for the rupee because India relies heavily on imported oil. When oil prices rise, importers need more dollars to pay for crude, increasing demand for the US currency and putting pressure on the rupee.
Importers have also stepped up hedging as oil prices climb, adding to dollar demand in the spot market, according to currency traders cited by Reuters.
RBI intervention limits downside
The Reserve Bank of India has been selling dollars through state-run banks in recent sessions to contain volatility and limit the rupee’s decline.
Traders said the RBI sold dollars around the 95.25-95.30 levels on Monday (August 10) and near 95.40 on Tuesday (August 11). Market participants expect the central bank to remain active if the rupee comes under further pressure.
The intervention can help smooth the rupee's movement, but sustained oil-driven dollar demand could continue to test the currency.
US inflation data in focus
Markets are also watching US inflation data due later on Wednesday (August 12). The data could influence expectations around the Federal Reserve’s interest-rate path.
A stronger-than-expected inflation reading could reinforce expectations of higher US rates, potentially supporting the dollar and adding another source of pressure on emerging-market currencies, including the rupee.
For now, the rupee’s near-term direction is likely to remain closely linked to crude oil prices, importer dollar demand, RBI intervention and global dollar movements.
-With Reuters inputs
