The Indian rupee shed 13 paise to trade at 95.56 against the US dollar, pressured by climbing crude oil prices, anticipated Federal Reserve rate increases, and heightened geopolitical risk, prompting the Reserve Bank of India to intervene in the market.
Key Points
- The rupee slipped 13 paise to 95.56 versus the dollar in early Monday trading.
- Surging crude oil values and a higher likelihood of a Fed rate hike in September weighed on the currency.
- The Reserve Bank of India is stepping in to curb sharp rupee depreciation.
- Brent crude rose on renewed supply concerns stemming from Middle East tensions.
- India’s foreign exchange reserves hit a record USD 729.328 billion.
Mumbai, Aug 31 (PTI) – The rupee fell 13 paise to trade at 95.56 per US dollar on Monday morning, weighed down by climbing oil prices and geopolitical strain.
Currency analysts noted that traders have increased bets on a September Fed rate increase, pushing US Treasury yields up and sparking a broad dollar rally that further dampened sentiment.
In the interbank forex market, the rupee opened at 95.56, down 13 paise from its previous close.
On Friday, the rupee had edged up by a modest 2 paise to finish at 95.43 against the dollar.
The unit started the day lower as the dollar index hovered at 99.62, with most assets slipping from Friday’s levels, observed Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors LLP.
Bhansali projected the rupee would likely oscillate between 95.25 and 95.75, with exporters likely to sell near 95.60 and importers purchasing any dips, indicating a lack of clear directional bias.
The dollar index, measuring the greenback against a six‑currency basket, was marginally lower at 99.62, down 0.07 %.
Brent crude, the global oil benchmark, rose 1.34 % to USD 89.28 per barrel in futures trading, fueled by a renewed Middle East supply‑risk premium following a US strike on Iran’s Larak Island and subsequent Iranian retaliation, heightening concerns over shipments through the Strait of Hormuz.
Traders said the RBI is intervening to prevent a steeper rupee decline, while stronger‑than‑expected inflows under the FCNR(B) scheme provided an additional boost to market confidence.
On the domestic equity front, the Sensex shed 226.60 points to 77,028.56, while the Nifty fell 120.40 points to 24,053.55.
Foreign institutional investors net sold equities worth Rs 5,039.80 crore on Friday, exchange data showed.
India’s forex reserves surged USD 12.422 billion to an all‑time high of USD 729.328 billion in the week ending August 21, the RBI reported on Friday.
The Ministry of Commerce is slated to convene industry bodies and export promotion council representatives on September 1 to review India‑U.S. trade performance.
The session will be chaired by Additional Secretary Darpan Jain, who also serves as the nation’s chief negotiator for the bilateral trade agreement.
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