The rupee depreciated 14 paise to close near its all-time low at 94.82 against the US dollar on Wednesday, pressured by rising Brent crude oil prices, hovering around USD 115 per barrel, and continued foreign capital outflows.
Forex traders said the elevated crude oil price is likely to sharply impact India’s import costs, while the ongoing West Asia crisis and concerns over potential wider conflict are fuelling investor anxiety. Also, analysts said that investors were awaiting cues from the upcoming US Federal Reserve policy decision.
Moreover, heavy foreign institutional investor (FII) selling so far this year further dented investor sentiment. At the interbank foreign exchange market, the rupee opened at 94.79 against the US dollar, then lost ground and touched an intraday low of 94.86 against the US dollar, and finally settled for the day at 94.82 (provisional), registering a fall of 14 paise over its previous close. On Tuesday, the rupee depreciated by 53 paise to close at 94.68 against the US dollar.
The rupee’s all-time low closing level of 94.85 versus the US dollar was recorded on March 27 this year. The rupee continued to trade weakly, as sustained FII outflows and elevated crude prices near USD 114 (Brent) kept pressure on the currency. Higher oil prices are significantly increasing India’s import bill and inflation risks, limiting any meaningful recovery in the rupee.
“The trend remains weak, with the currency consistently facing selling pressure on rebounds, indicating a lack of strong support at higher levels. In the near term, 94.40 is likely to act as resistance, while 95.25 remains the next key support, with the rupee expected to stay volatile and driven by crude and capital flows,” said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was up 0.08 per cent at 98.72. Brent crude, the global oil benchmark, was trading higher by 3.13 per cent at USD 114.74 per barrel in futures trade.
Also read: Rupee falls 41 paise to close at 94.56 against US dollar
Follow us
