Rupee falls 9 paise to 94.94 against US dollar in early trade
The Indian rupee weakened by 9 paise to 94.94 against the US dollar in early trading on Monday as rising crude oil prices and escalating tensions in the Middle East weighed on investor sentiment.
According to forex traders, the currency came under pressure after crude oil prices surged close to USD 93 per barrel following an escalation in the Israel-Lebanon conflict. Concerns over potential disruptions around the Strait of Hormuz and ongoing geopolitical uncertainty boosted demand for the US dollar as a safe-haven asset.
At the interbank foreign exchange market, the rupee opened at 94.93 against the greenback before slipping to 94.94. The currency had closed at 94.85 on Friday after gaining 73 paise, aided by suspected intervention from the Reserve Bank of India (RBI).
Market experts noted that the RBI's presence in the forex market helped prevent the rupee from breaching the 96-per-dollar mark last week despite significant foreign fund outflows.
Meanwhile, the RBI's latest data showed that India's foreign exchange reserves declined by USD 7.51 billion to USD 681.38 billion for the week ended May 22. This followed a decline of USD 8.09 billion in the previous week.
The US Dollar Index, which measures the strength of the American currency against a basket of major global currencies, was trading near 99 levels, supported by safe-haven demand amid continuing geopolitical tensions.
Brent crude oil futures rose nearly 2 per cent to trade around USD 92.92 per barrel, reflecting concerns over regional instability and supply disruptions.
Despite pressure on the currency market, Indian equities opened higher. The BSE Sensex gained over 200 points in early trade, while the NSE Nifty also traded in positive territory.
Investors are also closely monitoring developments in US-Iran negotiations after US President Donald Trump said Washington and Tehran were close to reaching a potential agreement, although he warned that alternative measures could be taken if talks failed.
