The Indian rupee on Tuesday weakened by 20 paisas to hit a fresh all-time low of 95.43 against the US dollar in early trade, as fragile market sentiment persisted following renewed military tensions between US and Iranian forces in the Gulf region.
Forex traders said rising geopolitical uncertainty has triggered a flight to safety, with investors moving capital into safe-haven assets. The US dollar, in particular, has emerged as the key beneficiary of this shift.
The US Dollar Index, which gauges the greenback’s strength against a basket of six currencies, was up by 0.14 percent to 98.52. Brent oil is currently hovering near $115 per barrel, which is putting pressure on oil-importing economies like India.
At the interbank foreign exchange market, the rupee opened at 95.30 against the US dollar and then further declined to its all-time low level of 95.43, registering a fall of 39 paise over its previous close.
“Oil prices rose in the previous session to above $114 after the US stepped up efforts to ensure shipping through the Gulf region, even as Iran targeted vessels and tensions escalated. The US has claimed it destroyed six Iranian boats. With oil prices surging, the rupee fell to a record closing low of 95.0875 yesterday and opened weaker at 95.43 today," said Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.
He added that the currency is becoming increasingly vulnerable as the dollar index strengthens on safe-haven demand and crude prices rise amid continued conflict, particularly around the Strait of Hormuz. Higher oil prices are likely to keep the rupee under pressure against the dollar, as oil companies and FPIs step up dollar buying.–news18.com