Rupee Comes Under Fresh Pressure, Slides 25 Paise To 95.33 Against US Dollar In Early Trade
Mumbai: The Indian rupee extended its decline on Thursday, falling 25 paise to 95.33 against the US dollar in early trade as Brent crude remained above $100 a barrel, raising concerns over India's oil import bill and external finances. Persistent dollar demand and geopolitical uncertainty surrounding the US-Iran conflict also kept the domestic currency under pressure. Rupee Weakens Beyond 95 At…
Mumbai witnessed the Indian rupee slipping further on Thursday, falling 25 paise to 95.33 against the US dollar as Brent crude oil maintained its value above $100 a barrel. This development heightened worries over India's substantial oil import expenditure and its external finances. The persistent demand for dollars and geopolitical uncertainty stemming from the US-Iran conflict further pushed the domestic currency down.
Initially, the rupee opened at 95.15 at the interbank foreign exchange market, but it slipped to 95.33 by the end of the trading day. This marks a significant drop of 34 paise from the previous day's closing rate of 95.08. Finance expert Anil Kumar Bhansali from Finrex Treasury Advisors noted that the rupee's breach of the psychologically significant 95 mark triggered additional dollar demand and stop-loss activities.
However, the Reserve Bank of India (RBI) managed to curb the slide. The dollar index, on the other hand, dropped by 0.09% to 98.72. Despite Brent crude oil trading 0.23% lower at $100.98 per barrel, it remained high due to tensions between the US and Iran, and concerns about oil supplies through the Strait of Hormuz. India relies on oil imports for nearly 90% of its crude needs, making its rupee particularly vulnerable to fluctuations in global oil prices.
Amit Pabari of CR Forex Advisors projected that a $10 rise in crude prices could add $12-15 billion to India's annual import bill, potentially straining the current account and putting further pressure on the rupee. If the USD-INR pair stays above 95, it might reach 95.50 and possibly even 96.00 if the weakening trend continues.
On the positive side, the rupee managed to strengthen slightly against the US dollar, gaining 4 paise to 94.39 in early trade. Meanwhile, the Sensex gained 38.07 points to 74,809.95, and the Nifty rose by 9.85 points to 23,439.20. However, foreign institutional investors sold Indian equities worth a net ₹582 crore on Wednesday, according to exchange data.
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