Why did the RBI intervene in the foreign exchange market, and what specific action did it take?

The RBI intervened to support the rupee as it weakened toward a record low due to a renewed surge in crude oil prices, which weigh heavily on India’s import bill and forex reserves. Specifically, the Reserve Bank of India sold dollars in both offshore and onshore foreign exchange markets, according to traders familiar with the matter.

How are rising crude oil prices affecting India’s currency and financial conditions, according to the report?

Rising crude oil prices — up over 20% in two weeks, with Brent breaching $90/barrel — are straining India’s forex reserves because crude comprises over two-thirds of the country’s import bill; this has revived demand for the US dollar from importers, exerting upward pressure on the USD/INR exchange rate and contributing to the rupee’s depreciation toward its record low of 96.9650 per dollar, while also pushing benchmark 10-year yields up by 4 basis points to 6.82%.