The Indian rupee plunged to a fresh record low of 96.07 against the US dollar on Friday, extending its losing streak for three consecutive sessions amid soaring crude oil prices and escalating tensions in West Asia.
Rupee Performance on Friday
At the interbank foreign exchange market, the rupee opened at 95.86 against the US dollar and slipped further to 95.94, down 30 paise from its previous close. On Thursday, the rupee had weakened to a record closing low of 95.64 against the dollar after touching an intraday low of 95.96.
Factors Behind the Decline
Forex traders said investor sentiment remained under pressure due to elevated crude oil prices, a strengthening US dollar, and concerns over disruptions in global energy supplies caused by the ongoing West Asia conflict. The dollar index, which measures the strength of the US currency against a basket of six major currencies, was trading 0.24 per cent higher at 99.05.
Brent crude, the global oil benchmark, rose 1.30 per cent to $107.09 per barrel in futures trade, adding further pressure on the rupee as India imports the majority of its crude oil requirements. Rising crude oil prices increase India's import bill and fuel demand for dollars, while geopolitical uncertainty continues to weigh on global financial markets.
Government Action on Fuel Prices
Earlier in the day, the government increased petrol and diesel prices by Rs 3 per litre in a bid to curb fuel demand and ease pressure on oil marketing companies. This move is expected to help reduce the country's import bill and support the rupee in the long run.
Outlook for the Rupee
The rupee has remained under sustained pressure in recent sessions. Analysts expect the currency to remain volatile in the near term, with further depreciation possible if crude oil prices continue to rise and geopolitical tensions persist. However, intervention by the Reserve Bank of India (RBI) could provide some support to the rupee.
Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.
About the Author
The TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports, and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.
