INR vs USD Rate, May 27, 2026: Rupee Steadies at 95.71 as Easing Crude Prices and State-run Bank Dollar Sales Support Sentiment

Mumbai, May 27:The Indian rupee traded largely flat on Wednesday, almost arresting the weakness witnessed in the previous session, as easing crude oil prices and intermittent dollar sales by state-run banks helped stabilise sentiment in the currency market.

The rupee was trading marginally lower by 0.03% at 95.7175 against the US dollar during the session, with traders pointing to improved risk sentiment after oil prices retreated from recent highs.

The local currency had come under sustained pressure over the past few sessions after geopolitical tensions in the Middle East triggered a sharp rise in crude oil prices, raising concerns over India’s import bill and inflation outlook.

Crude oil retreat offers relief

Oil prices eased on Wednesday after rallying sharply yesterday, as investors assessed the possibility of an immediate resolution to the US-Israeli conflict involving Iran.

The pullback in crude prices provided some relief to oil-sensitive Asian currencies, including the rupee, which has increasingly tracked movements in global energy markets due to India’s dependence on imported crude oil.

Analysts said elevated oil prices remain one of the biggest near-term risks for the Indian currency because they tend to widen the trade deficit and increase inflationary pressures in the economy.

Market participants also noted that the rupee’s reaction to crude oil movements has become significantly sharper in recent weeks amid heightened geopolitical uncertainty surrounding the Strait of Hormuz, a critical route for global oil shipments.

State-run banks help cap losses

Reports said intermittent dollar sales by state-run banks also helped the rupee during the session.

The intervention pattern has become familiar in recent trading days, with market participants suspecting that state-run lenders are acting on behalf of the Reserve Bank of India to smooth volatility in the foreign exchange market.

The central bank has been actively defending the rupee after the currency recently slipped toward record lows.

Analysts believe the RBI is likely to continue intervening if excessive volatility returns, particularly if geopolitical tensions once again trigger a sharp spike in crude oil prices.

Dollar remains firm globally

Despite the relative stability in the rupee, the US dollar continued to remain firm globally after Iran accused the United States of violating a ceasefire agreement, potentially complicating efforts to end the prolonged conflict.

The geopolitical uncertainty has supported demand for safe-haven assets and kept emerging market currencies under pressure.

Meanwhile, dollar-rupee forward premiums declined during the session, indicating that traders were scaling back expectations of aggressive policy tightening by the Reserve Bank of India.

The one-year implied yield eased, while swap markets also reflected softer expectations around future rate hikes.

Markets eye oil and RBI commentary

Going ahead, traders are expected to closely monitor crude oil prices, geopolitical developments and RBI intervention activity for further direction in the rupee.

While Wednesday’s stability offered some respite, analysts cautioned that volatility could remain elevated as global markets continue to react to developments in the Middle East and movements in energy prices.

Source:

• rates from https://www.moneycontrol.com/markets/currencies/