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The Indian rupee rose marginally on Thursday, unscathed by the jump in crude oil prices and higher U.S. Treasury yields, as the Reserve Bank of India likely sold dollars to aid the local unit.
The rupee closed at 83.1850 against the U.S. dollar compared with a close of 83.22 in the previous session.
Most Asian currencies fell, with the Malaysian ringgit leading losses.
The rupee faced headwinds like higher oil prices and the dollar index rising to the highest since November 2022, but the RBI's likely intervention prevented a fall towards record lows, traders said.
The central bank intervened in the non-deliverable forward and spot markets at the start of the India session, and was active during the session but was not aggressively selling U.S. dollars, according to three traders.
"It seems unlikely that the RBI will relent in defending the rupee in the near term," a foreign exchange trader at a private bank said.
The 83.29-83.30 level is likely to hold as a strong support for the local unit, the trader added.
The rupee had hit its lowest level on record - 83.29 - in October 2022.
Brent crude oil futures last quoted at $96 per barrel, after rising to $97.69 in Asia trading.
"If oil continues to climb, the RBI won't be able to hold on," said Anindya Banerjee, head of foreign exchange research at Kotak Securities, referring to the RBI's likely interventions.
The 10-year U.S. Treasury yield gained to 4.63%, hovering near its highest since October 2007.
The dollar index eased 0.3% at 106.44 after rising to a near 10-month high of 106.84 on Wednesday.
Equity-related outflows have also hurt the rupee. Foreign investors are close to breaking a six-month buying streak.
Investors await FTSE Russell's decision on adding India to its emerging markets government bond index. The outcome is expected Thursday. (Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala)