The rupee’s fall underscores the impact of rising oil prices, capital outflows and global uncertainty, leaving the currency vulnerable in the near term….reports Asian Lite News
The Indian rupee slid to a fresh record low in early trade, breaching the 93 mark against the US dollar as mounting geopolitical tensions in West Asia and sustained foreign outflows intensified pressure on the currency.
Opening at an all time low of 92.89 per dollar, the rupee weakened further past 93, signalling continued strain on the domestic unit amid volatile global conditions.
Currency experts pointed to a combination of elevated crude oil prices, persistent foreign portfolio investor selling and heightened geopolitical uncertainty as key drivers behind the decline.
K N Dey, a currency expert, said the rupee was trading around 93.15 to 93.16 after breaking the 93 level, noting that it had already hovered in the 93.25 to 93.35 range in offshore markets. He added that the absence of any de escalation in the Middle East was keeping markets highly volatile, with Brent crude recently touching 116 dollars before easing slightly.
Dey also highlighted sustained foreign investor outflows as a major factor weighing on the currency, noting that net equity sales of around Rs 80,000 crore since early March have added to downward pressure. He cautioned that unless tensions in the Middle East ease, the rupee could remain under stress, with the peak of the decline yet to be seen.
He added that while the Reserve Bank of India has been intervening to slow the pace of depreciation, it has not been able to reverse the broader trend.
Ponmudi R, chief executive of Enrich Money, also flagged continued pressure on the rupee due to high crude prices and global risk aversion. He said a sustained move above 93 would reinforce further weakness, with resistance seen in the 93.20 to 93.40 range, while support levels remain around 92.70 and lower.
The rupee’s fall underscores the impact of rising oil prices, capital outflows and global uncertainty, leaving the currency vulnerable in the near term.
