NEW DELHI: The Indian rupee weakened by 9 paise to 94.94 against the US dollar in early trade on Monday as surging crude oil prices, escalating Middle East tensions, and renewed demand for the US dollar put pressure on the domestic currency.According to forex market experts, the rupee-dollar exchange rate came under pressure after Brent crude oil prices climbed above USD 92 per barrel amid the worsening Israel-Lebanon conflict and uncertainty surrounding developments in the Middle East.At the interbank foreign exchange market, the Indian rupee opened at 94.93 against the US dollar before slipping further to an intraday low of 94.94. The decline comes after the rupee had strengthened sharply on Friday to close at 94.85 following suspected intervention by the Reserve Bank of India (RBI).Market analysts said the US Dollar Index, which measures the strength of the dollar against major global currencies, remained firm near the 99 mark due to increased safe-haven demand amid geopolitical uncertainty.Experts noted that rising global crude oil prices, concerns over the Strait of Hormuz, and ongoing tensions in the Middle East continue to influence the forex market, making emerging market currencies, including the rupee, vulnerable to volatility.Meanwhile, the latest RBI forex reserves data showed that India’s foreign exchange reserves declined by USD 7.51 billion to USD 681.38 billion during the week ending May 22, reflecting continued pressure on external balances.On the domestic market front, benchmark indices traded higher in early sessions, with the Sensex and Nifty posting gains despite weakness in the currency market. However, foreign institutional investors (FIIs) remained net sellers, offloading equities worth more than Rs 21,000 crore.Currency dealers said the outlook for the Indian rupee, USD-INR exchange rate, crude oil prices, and global financial markets will remain closely linked to developments in the Middle East and upcoming economic signals from major economies.
Leave a Reply