New Delhi: The Indian rupee weakened further in early trading on Friday, dropping 12 paise to touch a record intra-day low of 92.37 against the US Dollar amid rising global oil prices and cautious investor sentiment.
At the interbank foreign exchange market, the local currency opened at 92.33 before slipping to 92.37 during the session, marking its weakest intra-day level so far. The decline follows Thursday’s session when the rupee ended at 92.25 after falling 24 paise, having already touched a new low of 92.36 during the day.
Currency traders attributed the fall to several global and domestic factors. Elevated crude oil prices, continued foreign investor outflows and a stronger dollar have all put pressure on the rupee.
The surge in oil prices has been partly linked to tensions in West Asia. Reports that Iran may keep the strategically important Strait of Hormuz closed until the ongoing crisis is resolved have fuelled concerns about global energy supplies.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, higher oil prices and the strengthening of the dollar have weighed heavily on several global currencies. He noted that in the absence of intervention from the Reserve Bank of India, the rupee could have weakened further toward the 93-per-dollar mark.
The dollar index, which measures the greenback’s strength against six major currencies, edged up slightly to 99.77 during the session, reflecting continued global demand for the US currency.
Meanwhile, Brent crude — the international benchmark for oil prices — climbed nearly 5 per cent to around $96.57 per barrel in futures trading, adding to concerns for oil-importing economies like India.
Domestic equity markets also showed weakness. The BSE Sensex dropped 560.06 points to 75,474.36, while the Nifty 50 fell 184.45 points to 23,454.70 during the session.
Foreign institutional investors continued to pull money out of Indian equities, selling shares worth ₹7,049.87 crore on a net basis on Thursday, according to exchange data.
Adding to the economic backdrop, recent government figures showed that retail inflation in India rose to 3.21 per cent in February, up from 2.74 per cent in January, largely driven by higher food prices. Analysts say a combination of global uncertainty, energy costs and capital outflows will remain key factors influencing the rupee in the near term.
