an add a “geopolitical premium” on top of normal supply-and-demand forces. By leaning against the move near a big, watched level, the RBI signaled it’s willing to smooth the pace of depreciation, even if it can’t control the direction when oil stays expensive.
Why should I care?
For markets: An RBI defense near 97.00 can shift pressure into USDINR hedges.
When traders see official selling around the open, it raises the risk of getting squeezed if you bet on a clean break lower in the rupee. That often pushes speculation away from the spot rate and into tools like forwards, offshore non-deliverable forwards (NDFs), and options, where positions are easier to size and roll. The result is that USDINR can look “managed” around round numbers even while the market quietly reprices the cost of protection in short-dated hedges through higher forward pricing and options volatility. That matters most for oil-sensitive importers and other companies trying to lock in near-term dollar costs while Brent sits above $100.