According to informed traders, the Indian central bank has been active in the domestic foreign exchange market, selling US dollars to support the rupee's exchange rate. These individuals requested anonymity as they are not authorized to speak publicly. The dollar-rupee pair climbed 0.4% to 95.7975.

Sources noted that the central bank's dollar selling was particularly noticeable as the exchange rate approached the 95.80 level. A spokesperson for the Indian central bank had not responded to requests for comment at the time of reporting.

This intervention comes as Brent crude oil prices hover near $108 per barrel. As a major oil importer, higher crude prices tend to widen India's trade deficit and add to inflationary pressures.

Rising US Treasury yields are also putting downward pressure on the rupee by making Indian local bonds less attractive to foreign investors. Over the past few weeks, the Indian central bank has persistently intervened in the currency market.

A recent dollar deposit scheme brought in significant inflows, helping push the central bank's foreign exchange reserves to a record high. The rupee has depreciated by roughly 6% so far this year, making it one of the weaker performers among major Asian currencies.