Rupee Falls 14 Pai͏se to 92.42 Against US Dol͏lar A͏mid Rising Cr͏u͏de͏ and Gulf Tensi͏on͏s

Mu͏mb͏a͏i, March 17: Th͏e I͏n͏dian rup͏ee ͏slipped 1͏4 paise to trade at ₹92.42 ag͏ainst the US dol͏l͏ar in͏ earl͏y deals͏ on Tuesday, pressured by surgi͏ng crude ͏oil prices and cont͏inued ͏foreign fund outflow͏s amid ongoing tensions in West A͏sia.͏ The lo͏cal c͏urrency o͏pened at ₹92͏.35 ͏in the i͏nterbank foreign exchange and has been ͏struggling to hold ground amid global ͏mar͏ket͏ ͏volatili͏ty͏.

Rup͏e͏e Opens High͏er But ͏Faces V͏olati͏lityAt ₹92.͏39

The rupee beg͏an th͏e͏ day ͏slightly firmer at ₹92.39, recoveri͏ng from an intrada͏y low of ͏₹92.48 on͏ Monday, whe͏n it briefly touched a r͏ecord ͏ne͏ar-term low. Traders attributed the rebound to agg͏ress͏iv͏e dollar-selling͏ int͏ervention͏s by ͏the Reserve Bank of Indi͏a͏ ͏(RBI͏) through state-͏run ban͏ks. ͏Wh͏ile the͏ improved ri͏sk sentim͏ent offered so͏me support͏, the ͏loc͏al͏ unit͏ remains v͏ulnerab͏l͏e to͏ exte͏rnal ͏pressure͏s, especially ͏surges in crude prices and͏ geopo͏li͏tical unc͏e͏rtaintie͏s.

Ris͏ing Brent Crude Pres͏sures͏ Rupee to͏ Near All-Time Low

Brent crude, the global oil benchmark, remained elevated at $102.87 per barrel in early futures trade, rising over 2.68 per cent from previous levels. Analysts noted that crude price increases are adding significant pressure on India’s trade balance, as the country is a major energy importer. The Strait of Hormuz crisis has further exacerbated supply concerns, although some relief emerged after Iran allowed certain ships, including India-bound vessels, to pass, slightly easing risk sentiment.

US Dollar Strength Intensifies Rupee Weakness

The dollar index, measuring the greenback against a basket of six major currencies, advanced 0.19 per cent to 99.65, strengthening against the rupee. Elevated American currency levels combined with a cautious domestic market contributed to the pressure on the rupee. Forex traders also highlighted that the Indian currency’s vulnerability is compounded by expectations around the upcoming US Federal Reserve interest rate decision, which has kept investors on edge.

Domestic Equity Market Decline Adds to Pressure

Domestic equities mirrored global concerns, with the BSE Sensex falling 91.62 points to 75,411.23 in early trade, while the Nifty 50 dropped 34.25 points to 23,374.55. Subdued stock market performance, along with persistent foreign institutional investor (FII) selling of ₹9,365.52 crore in equities on Monday, intensified rupee weakness. Analysts noted that FIIs continue to move funds out of India amid global uncertainties, impacting local currency stability.

Trade Deficit Narrows Marginally Despite High Imports

Government data revealed that India’s trade deficit narrowed to $27.1 billion in February, compared to January, while merchandise exports slightly declined 0.81 per cent to $36.61 billion. Imports, however, surged 24.11 per cent to $63.71 billion from $51.33 billion a year earlier. Rising imports, particularly crude oil, have been a key driver behind the rupee’s depreciation, highlighting the persistent trade imbalance pressures.

RBI Intervention Curbs Losses, Protects 92.50 Level

The RBI has actively intervened in currency markets to prevent a sharper decline below ₹92.50, repeatedly selling dollars via state-run banks. Monday’s intervention helped the rupee close flat at ₹92.42, narrowly avoiding a record low of ₹92.4750, reached last week. Analysts emphasised that central bank action is crucial in stabilising the currency amid elevated crude prices and geopolitical risks in the Gulf region.

Currency Rebound Supported by Improved Global Sentiment

The rupee’s marginal recovery is partly attributed to easing oil supply concerns and improved global risk appetite after some ships were allowed through the Strait of Hormuz. Additionally, expectations of coordinated releases from International Energy Agency (IEA) member countries offered tentative relief. Despite this, traders remain cautious, as sudden oil price surges could again put pressure on the rupee.

External Economies and Oil Prices Continue to Influence INR

Economists note that India’s external balance remains sensitive to oil price volatility, as any sustained rise in crude prices increases the country’s import bill. HSBC highlighted that the surge in oil prices since late February represents a significant terms-of-trade shock for the rupee, with India’s non-oil trade deficit already substantial. The combination of Gulf tensions and high global crude prices continues to be the main driver of INR volatility.

Indian Rupee Among Weakest Asian Currencies

The rupee remains one of Asia’s worst-performing currencies, reflecting both domestic and external pressures. Its intra-day low of ₹92.47 last week underscored the sustained vulnerability. While interventions by the RBI have provided temporary support, analysts caution that the currency’s path remains influenced by crude price movements, FII flows, and global dollar strength.

The Indian rupee’s recent volatility highlights the ongoing impact of crude oil prices, geopolitical tensions in West Asia, and FII outflows on currency stability. Market participants and policymakers are closely monitoring external shocks, while central bank interventions play a key role in averting sharper depreciation and maintaining exchange rate stability.