The Indian rupee continued its downward trend for the fifth consecutive session on Friday, weakening by 24 paise against the US dollar in early trade. The rupee breached the 94-level to one US dollar and has now declined for five straight days.
Analysts noted that, despite a ceasefire between the United States and Iran, ship movement through the Strait of Hormuz remains uncertain after the US military seized another Iranian oil tanker on Thursday. The move has intensified the standoff and unsettled global fuel prices.
President Donald Trump has also ordered the US military to “shoot and kill” small Iranian boats engaged in deploying mines to disrupt traffic through the Strait of Hormuz.
The rupee’s decline is being driven by volatile crude oil prices, strong demand for the US dollar, and heightened geopolitical uncertainty in the Middle East.
Rising oil prices, triggered by tensions in the Strait of Hormuz, have increased dollar demand. Meanwhile, the surge in energy and defence stocks has also put pressure on gold and silver prices.
Substantial selling by foreign institutional investors (FIIs) in domestic equities has added further downward pressure on the rupee.
Investors are navigating a high-demand environment for the American currency, which continues to weigh on the Indian rupee.
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