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New Delhi: The Indian rupee continued its sharp decline on Tuesday morning, slipping 18 paise to touch 96.38 against the US dollar in early trade. The fall comes amid rising crude oil prices, persistent geopolitical tensions in the Middle East, and mounting pressure on global financial markets.
The domestic currency has now weakened by more than 5% since the Iran conflict escalated in late February, with nearly 2.2% of the decline coming in the past week alone.
On Monday, the rupee opened at 96.19 and later touched a record low of 96.39 against the dollar. Last week, the Indian currency had breached the 96-per-dollar mark for the first time before settling at 95.81.
Forex traders attributed the continued weakness to uncertainty surrounding the US-Iran tensions and rising global crude oil prices. Brent crude prices have remained elevated, increasing concerns for oil-importing nations like India.
Experts said higher crude prices lead to increased import bills and stronger demand for dollars, which puts pressure on the rupee. Continued foreign institutional investor (FII) outflows have also negatively impacted the Indian currency.
Market experts believe the rupee may continue trading with a negative bias due to the strengthening US dollar and rising US treasury yields. However, possible intervention by the Reserve Bank of India (RBI) and restrictions on gold and silver imports could provide some support to the domestic currency at lower levels.
Investors are closely watching global developments, especially diplomatic efforts between the US and Iran, which could influence oil prices and currency markets in the coming days.
