Rupee slumps 62 paise to close at 96.30 against US dollar

The Indian rupee weakened sharply on Tuesday, falling 62 paise to close at 96.30 against the US dollar, marking one of its steepest single-day declines in recent months. The sharp depreciation was driven by soaring global crude oil prices and renewed geopolitical tensions in West Asia following the escalation of the US-Iran conflict.

The rise in oil prices increased demand for the US dollar from importers, putting significant pressure on the domestic currency.

Market analysts said concerns over higher import costs, rising inflation, and increased demand for safe-haven assets such as the US dollar contributed to the rupee's decline. Although the Reserve Bank of India (RBI) is believed to have intervened in the foreign exchange market to limit volatility, the rupee remained under pressure throughout the trading session.

Investors are also closely watching global economic indicators, including US inflation data, which could influence the Federal Reserve's interest rate decisions and further impact currency markets.

The weakening rupee comes at a time when India's economy is already facing inflationary pressures from rising fuel prices. Experts believe the currency's near-term movement will largely depend on crude oil prices, geopolitical developments, and the RBI's policy response.