West Asia Tensions and Rising Crude Oil Prices Weigh on Indian Currency Despite Strong Domestic Equities
Mumbai (Economy India): The Indian rupee extended its losing streak for the third consecutive trading session, settling 9 paise lower at 96.25 against the US dollar on Wednesday. The domestic currency came under pressure amid escalating geopolitical tensions in West Asia and a fresh rise in global crude oil prices, which increased demand for the US dollar.
Forex traders, however, noted that gains in the domestic equity market and weakness in the US dollar index helped limit further losses in the rupee.
Rupee Ends at 96.25
At the interbank foreign exchange market, the rupee opened at 96.12 against the greenback and traded within a range of 96.04 to 96.35 during the day. It finally settled at 96.25, down 9 paise from its previous close.
The decline marks the third straight session of losses, reflecting persistent pressure from global developments.
Crude Oil and Geopolitical Risks Impact Sentiment
Currency dealers attributed the rupee’s weakness primarily to renewed geopolitical uncertainty in West Asia, which has pushed international crude oil prices higher.
Since India imports more than 85% of its crude oil requirements, rising oil prices increase the country’s import bill and demand for dollars, putting pressure on the domestic currency.
- Closing Level: ₹96.25 per US dollar
- Change: Down 9 paise
- Opening Level: ₹96.12
- Day’s Range: ₹96.04 – ₹96.35
- Main Pressure: Rising crude oil prices and West Asia tensions
- Support Factors: Strong domestic equities and weaker US dollar
Equities and Weak Dollar Offer Support
Despite external headwinds, the rupee avoided a sharper fall due to positive sentiment in Indian equity markets and a relatively weaker US dollar against major global currencies.
Strong foreign investor confidence in domestic equities and expectations of steady economic growth continue to provide support to the Indian currency.
Market Outlook
Analysts expect the rupee to remain sensitive to global crude oil movements, geopolitical developments, US Federal Reserve policy signals, and foreign capital flows in the coming sessions.
Any sustained rise in crude prices or further escalation in geopolitical tensions could keep pressure on the currency, while strong domestic macroeconomic fundamentals may help cushion sharp volatility.
