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Rupee Plunges 34 Paise to 95.08 Against Dollar as Crude Prices Surpass $100
Author
Shoonya Team
The rupee slumped 34 paise to close at 95.08 against the US dollar on Wednesday as crude prices crossed $100 per barrel for the first time in almost six weeks, stoking concerns over inflation and high forex outflows. Weak equity markets and FII selling added to the pressure on the local currency.
How the Rupee Moved During the Session
At the interbank foreign exchange market, the rupee opened at 94.80, which was also its intraday high. The local unit fell to an intraday low of 95.22 as oil prices surged, then settled at 95.08, down 34 paise from its previous close of 94.74.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.84, up 0.05%.
What Pushed Brent Crude Above $100
Brent crude futures surpassed $100 a barrel after attacks on oil facilities and ships in West Asia threatened to further strain an already disrupted supply chain amid US-Iran tensions. Brent was trading higher by 2.94% at $100.73 per barrel during the session.
The US military destroyed five Iranian oil tankers on Tuesday in response to the latest attacks on its warships, and Iran hit back at American targets in Jordan. The escalation renewed concerns over Gulf oil supply routes and pushed energy prices sharply higher.
What Analysts Said About the Rupee’s Direction
The rupee had weakened noticeably, reflecting renewed pressure from Brent crude moving past $100 amid escalating Middle East tensions and concerns over disruption to Gulf oil supplies. Thursday’s trading range was expected to be between 94.75 and 95.50.
Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury AdvisorsThe decline came from rising crude prices and risk aversion in global markets. FII outflows also pressurised the rupee, though it recovered some initial losses on a weak dollar. The local currency was expected to trade with a negative bias, with further escalation of geopolitical tensions between the US and Iran posing an additional risk.
Anuj Choudhary, Research Analyst, Mirae Asset SharekhanDomestic Equity Markets and FII Activity
Equities added to the pressure on sentiment during the session:
- Sensex fell 813.35 points to settle at 74,764.23
- Nifty declined 203.60 points to close at 23,431.50
- Foreign institutional investors sold equities worth ₹582.99 crore on a net basis, per exchange data
Final Outlook
The rupee’s move to 95.08 reflects the combined weight of triple pressure: higher crude import costs, FII equity selling, and global risk aversion linked to the US-Iran escalation. How Brent crude and geopolitical developments in West Asia evolve in the coming sessions will determine whether the currency holds near current levels or faces further pressure.
Source: Moneycontrol
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