Rupee Slumps Against US Dollar as West Asia Conflict and Oil Volatility Trigger Fourth Consecutive Decline
Rupee Continues Downward Slide Amid Global Friction
The Indian Rupee fell for the fourth consecutive day, shedding 8 paise to settle at 96.33 (provisional) against the US dollar. This depreciation is being driven by a strengthening greenback and heightened volatility in global crude oil prices as the West Asia crisis intensifies.Trading activity saw the rupee open at 96.28, fluctuating within a range of 96.22 to 96.37 during the session. The local currency had previously closed at 96.25 on Wednesday before reaching its current level.
Geopolitical Tensions and Crude Oil Volatility Impact Currency
The volatile international market remains under strain due to back-and-forth strikes between the US and Iran across West Asia. Renewed threats to the Strait of Hormuz have disrupted interim deals intended to end the Iran war, raising concerns about a potential return to all-out conflict.Brent crude, the primary global oil benchmark, was trading at USD 84.62 per barrel in futures trade, reflecting a 0.39 per cent decrease. Meanwhile, the dollar index, which measures the greenback against a basket of six currencies, traded marginally up by 0.02 per cent at 100.50.
Market Sentiment and Foreign Institutional Investor Outflows
Stock markets remained largely stagnant on Thursday as investors reacted to the prevailing economic climate. The Sensex edged up by a negligible 1.44 points to reach 77,186.87, while the Nifty slipped 5.75 points to finish at 24,072.75.Data from the exchange highlights significant pressure on domestic equity markets, with Foreign Institutional Investors (FIIs) offloading equities worth Rs 735.83 crore on Wednesday. These outflows have added further weight to the depreciation of the local unit.
Expert Outlook on Rupee Range and RBI Intervention
Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, expects the rupee to maintain a negative bias due to geopolitical tensions and elevated oil prices. However, he notes that global sentiments may see some improvement following comments from Donald Trump regarding Iran's desire to reach a deal with the US.The analyst anticipates the USD-INR spot price will trade in a range of Rs 96.10 to 96.60. He also highlighted that any intervention by the Reserve Bank of India (RBI) could provide support at lower levels, while traders look for cues from upcoming US retail sales and weekly unemployment claims data.
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