Noida, Sep 8 (APAC Media): The rupee fell 10 paise to 94.66 against the US dollar in early trade on Tuesday, weighed down by elevated crude oil prices and concerns over geopolitical tensions in the Middle East.
The domestic currency opened at 94.62 against the dollar and touched 94.66 in early deals, down from its previous close of 94.56.
The rupee has remained under pressure as a sharp rise in international crude oil prices raised concerns over India’s import bill and demand for the US currency.
Brent crude prices were trading close to $98 a barrel amid heightened uncertainty over oil supplies from the Middle East. A sustained rise in crude prices could increase India’s trade deficit and add to inflationary pressures, given the country’s high dependence on imported crude oil.
Forex market participants said the rupee was also being influenced by movements in the dollar, global risk sentiment and foreign fund flows.
The Reserve Bank of India has been closely monitoring currency movements and is expected to intervene in the foreign exchange market if volatility intensifies.
A weaker rupee makes imported commodities, including crude oil, more expensive for domestic buyers. This can put pressure on India’s inflation outlook while increasing the cost of servicing dollar-denominated liabilities.
Market participants are expected to track developments in global oil prices, US monetary policy and geopolitical tensions for further direction.
The rupee’s movement is likely to remain closely linked to crude prices in the near term, with any further escalation in Middle East tensions potentially adding to pressure on the domestic currency.
Analysts said the RBI’s intervention and foreign-currency inflows could provide some support to the rupee, although elevated oil prices remain a key risk for the currency.
–ENDS–
Disclaimer: This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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