Rupee Weakens Against Dollar Amid Rising Crude Prices and Market Volatility
The Indian rupee experienced a further decline in early trading on Tuesday, depreciating by 9 paise to reach 83.53 against the US dollar, influenced by a robust American currency and soaring crude oil prices. This depreciation comes after the rupee settled at 83.44 against the dollar on Monday, marking a 6 paise drop from its previous close. Forex experts attribute the weakening to negative trends in domestic equities and ongoing foreign fund outflows, which have impacted investor sentiment adversely.
In addition to currency movements, the dollar index saw a slight increase of 0.13 percent, reaching 106.34. Meanwhile, Brent crude futures climbed by 0.53 percent to USD 90.58 per barrel amidst escalating tensions in the Middle East following recent incidents. The BSE Sensex and NSE Nifty also reflected market concerns, recording declines in their latest sessions.
Market analysts are closely monitoring actions from the Reserve Bank of India (RBI) to address the rupee’s downward trajectory. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors, emphasized the role of foreign portfolio investors who have increased their dollar purchases amid rising U.S. yields and geopolitical risks. The overall economic landscape is further pressured by a marginal increase in wholesale inflation and a slight dip in India’s merchandise exports.
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