Indian currency breached 96 against US dollar (Img: Internet)
New Delhi: The Indian rupee touched a fresh all-time low against the US dollar on Friday as rising crude oil prices, escalating tensions in West Asia and persistent foreign capital outflows weighed heavily on the currency.
At the interbank foreign exchange market, the rupee opened at 95.86 and weakened further to touch 96.14 during intraday trade. The sharp fall came after the currency had already closed at a record low level on Thursday.
Market experts said the latest fall in the rupee was largely linked to soaring global crude oil prices following growing geopolitical tensions involving the United States, Israel and Iran.
Rupee falls to record low past Rs 95 per dollar; Raising inflation fears
Concerns over the security of the Strait of Hormuz a key global oil shipping route have added to fears of supply disruptions. Brent crude prices climbed above 109 dollars per barrel in futures trade, increasing pressure on oil-importing countries like India.
India imports more than 85 per cent of its crude oil needs, making the economy highly sensitive to global energy price fluctuations. Rising oil prices increase India’s import bill and push up demand for dollars, which weakens the rupee further.
Forex traders also pointed to continuous foreign institutional investor outflows and weak foreign direct investment inflows as key reasons behind the rupee’s decline.
At the same time, the dollar index strengthened against major global currencies, putting additional pressure on emerging market currencies, including the Indian rupee. Analysts said investors are moving toward safer assets amid uncertainty in global markets, leading to volatility in currencies and equities.
Rupee Slips as Dollar Strengthens; Middle East Tensions and Rising Crude Oil Prices Raise Concerns
Indian equity markets traded lower amid the uncertainty. The Sensex and Nifty both slipped during Friday’s session, reflecting cautious investor sentiment.
Asian markets also witnessed declines, with major indices in Japan, Hong Kong, South Korea and Taiwan ending lower due to concerns over geopolitical tensions and rising energy costs.
Market participants are now closely watching possible intervention measures by the Reserve Bank of India and further developments in global oil markets.
