The Reserve Bank of India (RBI) was very active in the currency markets this Friday. According to market traders, the central bank stepped in to sell dollars across different segments to stop the rupee from falling to a record low. This move comes as the Indian currency faces major pressure from high global oil prices and strong dollar demand from local companies.

Bankers reported that the RBI did not just stick to one market. They were seen at work in the onshore spot market (where currency is bought for immediate delivery) and the forward markets. They also intervened in the non-deliverable forward or NDF market (an offshore market where the rupee is traded outside India). This 'everywhere' approach shows the RBI is serious about keeping the currency stable.

The rupee was trading around 96.50 per dollar during the afternoon. This is very close to its all-time low of 96.96 which was touched back in May. Even though crude oil prices dropped by about 4 per cent to around $96.6 per barrel, the rupee did not recover easily. Large Indian companies still needed a lot of dollars for their business, which kept the rupee under stress.

To manage this, the RBI used dollar-rupee buy/sell swaps. This action pushed down the 'forward premiums' (the extra cost to buy dollars at a future date). The 1-year implied yield, which is a key interest rate tracker in the currency market, fell by 4 basis points to 2.93 per cent. These technical moves help control liquidity and make it less attractive for speculators to bet against the rupee.

For bank officers in India, this shows the RBI is closely watching the 97-per-dollar level. Traders believe the central bank might feel uncomfortable if the rupee crosses this psychological mark. In recent weeks, the RBI has made small moves, but Friday's action felt much stronger. This makes it difficult for treasury departments at banks to predict exactly how much weakness the RBI will allow before stepping in again.

This situation is important for import-export customers of Indian banks. If the rupee stays weak, imports like oil and electronics become more expensive. Bank staff working in forex departments should note that volatility might increase if oil prices stay high. The market is now waiting to see if the central bank will continue this heavy support or let the currency find its own level based on global factors.

In the coming days, all eyes will be on global crude oil trends. Since India imports a huge portion of its oil, high prices lead to a higher demand for dollars, which hurts the rupee. Bankers should watch the daily closing rates near the 97.00 level. If the RBI continues its 'here, there, and everywhere' strategy, we might see the rupee remain stable despite global pressure.