India's Rupee Weakens Amid Global Uncertainty

Rupee Falls 35 Paise to 93.88 Against US Dollar Amid Strong Greenback and Crude Price Concerns​

Mumbai, March 24: The Indian rupee weakened by 35 paise to close at 93.88 (provisional) against the US dollar on Tuesday, pressured by a strengthening dollar and elevated global crude oil prices that unsettled investor sentiment.

Dollar Strength and Oil Prices Weigh on Rupee​

Forex traders indicated that persistent foreign fund outflows, coupled with uncertainty surrounding the West Asia crisis, continued to exert pressure on the domestic currency. A stronger US dollar against major global currencies further dampened the rupee’s outlook.

At the interbank foreign exchange market, the rupee opened at 93.66 against the dollar and witnessed volatility throughout the session before settling lower at 93.88, compared to its previous close.

The currency had already shown signs of weakness earlier, breaching the 94 mark for the first time on Monday before ending that session flat at 93.53.

Foreign Outflows Continue to Impact Currency​

According to market participants, sustained foreign institutional investor outflows have been a key factor behind the rupee’s depreciation.

Foreign institutional investors offloaded equities worth ₹10,414.23 crore on a net basis on Monday, as per exchange data, adding to downward pressure on the currency.

Geopolitical Uncertainty Adds to Volatility​

Global geopolitical developments also contributed to market uncertainty. Statements from US leadership regarding discussions with Iran and developments around the Strait of Hormuz kept investors cautious.

Conflicting signals, including Iran’s denial of certain claims and ongoing hostilities in the region, continued to create volatility, influencing global crude oil prices.

Dollar Index and Crude Oil Movement​

The dollar index, which measures the strength of the US dollar against a basket of six currencies, was trading 0.23 percent higher at 99.18.

Meanwhile, Brent crude, the global oil benchmark, was quoted 1.45 percent lower at USD 101.4 per barrel in futures trade.

Domestic Equities Show Strength Despite Currency Pressure​

Despite the weakness in the rupee, domestic equity markets ended on a strong note. The Sensex surged 1,372.06 points, or 1.89 percent, to close at 74,068.45, while the Nifty gained 209.65 points, or 0.93 percent, to settle at 22,722.30.

Rupee Outlook​

Market experts highlighted that continued foreign fund outflows and a firm US dollar are likely to keep emerging market currencies, including the rupee, under pressure.

The expected trading range for the rupee on Wednesday is seen between 93.65 and 94.25, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.