MUMBAI, July 30 (Reuters) - The Indian rupee closed nearly flat on Thursday as pressure from sustained volatility in oil prices and corporate dollar demand was blunted by likely central bank intervention that helped the currency hold clear of the psychologically key 96 level.
The rupee closed at 95.68 per U.S. dollar, little changed from 95.6475 in the previous session.
Brent crude oil futures swung between gains and losses in a $93-$89 range on Thursday as renewed attacks between the United States and Iran spurred fresh concerns about oil flows through key shipping routes.
State-run banks, meanwhile, were spotted selling dollars near the day's low for the rupee around 95.75. Elevated oil price volatility has also contributed to a pickup in importer hedging, traders said, which has weighed on the rupee in recent sessions.
India imports nearly 90% of its crude requirements, making it one of the world's most vulnerable economies to the Middle East oil shock.
The rupee had declined past 96 per dollar and appeared vulnerable to breaching its record low of 96.96 last week, before the central bank stepped in to shore up the currency.
"While recent rupee strength has been aided by RBI intervention, the broader backdrop of elevated crude oil prices, persistent geopolitical tensions, and a Fed that continues to keep the door open for further tightening remains supportive for the dollar," said Amit Pabari, managing director at FX advisory firm CR Forex.
The 30-year Treasury bond yield hit a 19-year high of 5.239% on Thursday, a day after the Federal Reserve kept interest rates on hold, but Chair Kevin Warsh offered mixed messages on the outlook for monetary policy and inflation.
The dollar index was steady at 100.8 while most Asian currencies slipped.
Reporting by Jaspreet Kalra; Editing by Harikrishnan Nair, Mrigank Dhaniwala and Ronojoy Mazumdar
Source: Reuters