The Indian rupee weakened against the dollar amid a surge in global crude prices and renewed geopolitical uncertainty, despite some foreign capital support and potential Reserve Bank intervention.
The rupee weakened on Tuesday as a jump in global crude prices and renewed geopolitical uncertainty pushed the local currency lower against the dollar. It finished the session at 95.43 per dollar, provisional, after opening at 95.38 and moving in a tight range through the day, according to market traders.
Dealers said the currency drew some support from recent foreign capital inflows, which helped limit the slide. Even so, the combination of higher oil prices and firmer US Treasury yields kept pressure on the rupee, which had already ended the previous session weaker.
Anuj Choudhary, a research analyst at Mirae Asset ShareKhan, said uncertainty around any agreement between the United States and Iran was also weighing on sentiment. He said the rupee is likely to retain a slight negative bias, though Reserve Bank of India intervention could help if the currency comes under further stress. He also pointed to US inflation data due later this week as a factor that may keep traders cautious.
The latest move fits a broader pattern seen over the past year, as the rupee has been buffeted by external shocks, persistent oil-price pressure and capital outflows. Research from CRISIL, Brickwork Research and Union Bank of India has repeatedly highlighted the currency’s sensitivity to geopolitical tensions, US interest-rate expectations and import demand, especially from energy buyers. Analysts have also warned that a sustained rise in crude could add to India’s inflation and current-account pressures.
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