The Indian rupee erased its early gains and settled 9 paise lower at 93.44 (provisional) against the US dollar on Wednesday, weighed down by rising crude oil prices and elevated domestic inflation data.
According to forex analysts, strong buying in domestic equities failed to support the currency, even though it initially strengthened after Donald Trump indicated that a second round of talks with Iran could take place ‘over the next two days’.
At the interbank foreign exchange market, the rupee opened at 93.19 and touched an intraday high of 93.13 against the greenback. However, it later lost momentum and settled at its day’s low of 93.44, marking a decline of 9 paise from the previous close.
Earlier on Monday, the rupee had weakened by 52 paise to close at 93.35 against the US dollar. The forex market remained closed on Tuesday due to Ambedkar Jayanti.
Government data released on Wednesday showed that wholesale inflation, measured by the Wholesale Price Index (WPI), surged to a more than three-year high of 3.88 per cent in March. The rise was driven by increased prices of fuel, power and manufactured goods amid tensions in West Asia.
Retail inflation, based on the Consumer Price Index (CPI), also rose to 3.4 per cent in March from 3.21 per cent in February, largely due to higher prices of certain food items.
Also read: India’s exports drop 7.44 pc in March as West Asia crisis persist
Jateen Trivedi, VP Research Analyst (Commodity and Currency) at LKP Securities, said the rupee remains highly sensitive to developments around the Strait of Hormuz, a crucial passage for global oil supplies. “In the near term, the rupee is likely to trade in the 93.10–93.65 range, with direction depending on geopolitical developments and oil price movements,” he noted.
Meanwhile, the dollar index, which tracks the US dollar’s strength against a basket of six currencies, edged up 0.05 per cent to 97.95.
Global oil benchmark Brent crude rose 1.50 per cent to USD 96.21 per barrel in futures trading.
In the domestic equity market, the 30-share BSE Sensex surged 1,263.67 points, or 1.64 per cent, to close at 78,111.24, while the Nifty 50 advanced 388.65 points, or 1.63 per cent, to settle at 24,231.30.
Foreign Institutional Investors (FIIs) were net sellers on Monday, offloading equities worth ₹1,983.18 crore, according to exchange data.
Follow us
