The rupee continued its downward trend for the fifth straight session on Friday, weakening by 22 paise to close at 94.23 (provisional) against the US dollar. The decline was driven by rising crude oil prices and a strengthening US currency, while uncertainty surrounding West Asia peace negotiations added to market pressure.
Although a ceasefire remains in place between the United States and Iran, uncertainty over shipping activity through the Strait of Hormuz has kept global fuel markets on edge. Forex analysts noted that this instability, along with sharp declines in domestic equities and sustained foreign fund outflows, weighed heavily on the local currency.
US President Donald Trump has also directed the military to take strict action against Iranian boats suspected of deploying mines in the Strait of Hormuz, further heightening geopolitical tensions.
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At the interbank foreign exchange market, the rupee opened at 94.25 and traded within a narrow range during the session. It touched an intraday high of 94.18 and a low of 94.31 against the US dollar. The domestic currency eventually settled at 94.23 (provisional), marking a fall of 22 paise from its previous close.
On Thursday, the rupee had already declined by 23 paise to end at 94.01 against the greenback, registering its fourth consecutive day of losses. Over the past five trading sessions, the rupee has depreciated by more than 1 per cent from its April 17 closing level of 92.91.
According to Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, the rupee came under pressure due to heightened risk aversion in global markets, as tensions persisted amid continued disruptions in the Strait of Hormuz.
He added that a strong US dollar and surging crude oil prices further weakened the rupee, and projected that the USD-INR spot rate could trade within a range of 94 to 94.62 in the near term.
Meanwhile, the dollar index, which measures the strength of the US dollar against a basket of six major currencies, edged up 0.02 per cent to 98.62.
Brent crude, the global oil benchmark, climbed 2.21 per cent to USD 107.39 per barrel in futures trading.
In domestic equity markets, benchmark indices also ended sharply lower. The 30-share Sensex dropped 982.71 points, or 1.27 per cent, to settle at 76,681.29, while the Nifty declined 275.10 points, or 1.14 per cent, to close at 23,897.95.
Foreign Institutional Investors (FIIs) continued their selling streak, offloading equities worth approximately Rs 3,254.71 crore on Thursday, according to exchange data.
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