The Indian rupee was little changed on Wednesday as dollar sales from foreign banks, likely related to modest foreign portfolio inflows, were unable to help the currency amid lingering anxiety over the US-Iran war which kept oil prices elevated.
The rupee was at 95.43 per dollar, barely changed from its close at 95.4350 previous session.
Brent crude oil prices were lumbering near $90 per barrel, up over 7% on the week so far. The U.S. and Yemen's Iran-aligned Houthis reported separate attacks on shipping on Tuesday as prospects for ending the Iran war appeared to dim.
Traders reckon that the rupee is likely to stay under strain till oil prices remain elevated but frequent interventions by the Reserve Bank of India over recent sessions have also dulled appetite to wager against the currency aggressively.
"It's hard to see it (USD/INR) falling below 95.30 in the near term, unless the RBI intervenes heavily," a trader at a Mumbai based bank said.
Later in the day, the focus will turn to consumer inflation data from both India and the U.S. Economists polled by Reuters have forecast India's year-on-year CPI for July at 4.5%, up from 4.38% in June.
India's central bank had kept policy rates unchanged last week, drawing comfort from still modest inflation and robust capital inflows under measures to strengthen India's balance of payments.
"We continue to see policy rates heading higher in India, but we have pushed out the timing of our 50bps rate hikes to start from the December 2026 meeting," analysts at MUFG said in a note.
In the U.S., meanwhile, consumer prices are expected to edge up 0.1% in July after falling 0.4% in June, according to a Reuters poll. Money markets are pricing an about 50% chance of a Fed rate hike next month.
