Subhadip Sircar

India’s central bank intervened to shore up the struggling rupee as elevated oil prices pushed the currency to a record low.

Global investors expect the Indian rupee to weaken further, with some even gaming out scenarios where the currency falls to an unprecedented 100 per dollar.

India’s central bank will inject liquidity to the equivalent of $5 billion via a swap auction, it said in a statement.

India’s rupee advanced the most in Asia after the central bank intervened and as policymakers are said to be considering options, including an interest-rate hike, to defend the currency.

The Iran war is piling pressure on emerging Asian markets, pushing some currencies and bond yields toward levels once considered unlikely.

Rising oil prices and inflation concerns had pushed the rupee to a record low before the currency rebounded Thursday.

Multi-year high swap rates are driving some Indian debt fund managers into trades aimed at boosting fixed-income returns.

A Nifty gauge of government-controlled banks has fallen 6% this month.

The rupee’s relentless slide is prompting tougher scrutiny of Indian companies as investors and analysts press executives on their foreign-exchange strategy.

The recent surge in Indian bond yields may extend as investors weigh prospects of interest-rate hikes, while concerns grow over the government’s fiscal position.