Market News

MUMBAI, Sept. 22 (Reuters) — The Indian rupee shed modest early gains on Tuesday to trade nearly flat, as central bank intervention countered pressure from corporate dollar demand and rising oil prices.

The rupee was at 95.8050 per dollar as of 1:00 p.m. IST, after touching a session high of 95.66 in early trading.

Brent crude prices rose for the first time in five sessions as investors awaited developments on potential U.S.-Iran talks at the United Nations General Assembly this week.

Tehran and Washington exchanged threats on Sunday, although U.S. President Donald Trump said he would be open to meeting Iran's president, who is expected to be in New York this week for the U.N. meeting.

Corporate dollar hedging has remained elevated amid the uncertainty, while pressure from higher import prices has also been reflected in near-tenor payments, an FX salesperson at a large foreign bank said.

Persistent intervention by the Reserve Bank of India (RBI) has helped contain losses, with traders pointing to dollar sales by state-run banks in the 95.75–95.85 band on Tuesday.

The central bank also likely conducted dollar-rupee sell/buy swaps, which would drain rupee liquidity from the banking system, traders said. The swaps cushioned dollar-rupee mid-to-far-tenor premiums, lifting them off the day's low.

Asian currencies were mixed, while technology stocks powered broader stock markets higher. Mumbai equities lagged, hurt by the lack of AI-linked wagers that have driven regional shares higher.

The dollar index was a tad higher at 100.5.

“Price action has reinforced our view that near-term risks for the dollar remain skewed to the upside,” analysts at ING said in a note.