Yesterday, the rupee recovered to 73.04 to a United States dollar after touching an all-time low after the RBI intervention. The rupee opened the day's trade at the Inter-Bank Foreign Exchange Market at 73.67 to a dollar from its previous close of 73.34.
India's currency fell Wednesday to its lowest-ever level against the US dollar.
"The biggest policy anchor for rupee is high real rates".
The current account has faced additional pressure as India, like many emerging market economies, has also suffered due to rising US interest rates drawing investors away.
United Nations court tells USA to ease Iran sanctions in blow for Trump
The decision added to mounting tension between the US and Iran, which is the target of increasing USA economic sanctions. The US argued the court had no jurisdiction in the case as it concerned its national security.
With speculation growing for steeper interest rate rises, the benchmark 10-year bond yield rose as much as 10 basis points to 8.21 percent, not far from 8.23 percent hit in late September which was the highest since November 2014.
Oil prices stood around four year highs on Thursday.
Consistent dollar demand from importers, mainly oil refiners, following higher crude oil prices, have kept the rupee under pressure. "Respite is unlikely in the short term, as official supportive action (by way of liquidity boost, likely rate hike support on Friday) is being overwhelmed by global risk catalysts", said Radhika Rao, economist at DBS Bank Ltd.
A rally in crude oil prices is expected to put more pressure on the rupee and it may send it near the 74-mark, said analyst Bhaskar Panda.
Edelweiss Securities expects that external headwinds in the form of surging crude prices and a depreciating rupee continue to be key concerns for the bond markets.