Rupee Drops 22 Paise to 85.98 Against Dollar on Rising Crude, Strong USD

Mumbai, July 16: The Indian rupee declined by 22 paise to 85.98 against the US dollar in early trade on Wednesday, pressured by a rise in global crude oil prices and a slowdown in both exports and imports, indicating weakening trade momentum. The slight rise in the Brent crude price increases demand for the dollar, due to India’s heavy reliance on oil imports.

Further, a stronger dollar index (around 98.6, a 0.5% increase) driven by U.S. inflation data and rising U.S. Treasury yields has boosted USD demand, which saw the weakened rupee during the early trades on Wednesday.

Rupee Opens Weak Amid Oil Gains

At the interbank foreign exchange, the rupee opened at 86.02 and later moved to 85.98, down from its previous close of 85.76. This marks a reversal from Tuesday’s session, when the rupee had appreciated by 16 paise.

Brent crude futures rose 0.22 per cent to USD 68.86 per barrel, rebounding after a two-day decline. The uptick in oil prices followed expectations of stable demand from major consumers, such as the US and China, along with geopolitical developments involving potential US tariffs on Russian oil.

Trade Data Reflects Economic Softness

India’s exports in June stood unchanged at USD 35.14 billion, while imports fell, resulting in a trade deficit of USD 18.78 billion. The drop in both exports and imports points to a broader slowdown in economic activity.

Domestic Markets and Capital Flows

In domestic equities, the BSE Sensex slipped 103.16 points to 82,467.75 in early trade, and the NSE Nifty declined 56.75 points to 25

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