The rupee continues to remain under pressure due to rising crude oil prices, geopolitical tensions and continued selling by foreign investors. As a result, the rupee witnessed a sharp decline against the dollar on Monday, closing at its all-time low against the US currency. According to experts, the rupee may further depreciate against the dollar in the coming days, and it may potentially reach the levels of 96 to 97.
According to reports, the rupee fell 39 paise to close at a record low of 95.23 (provisional) against the US dollar on Monday. The decline is due to ongoing tensions in the Middle East, which have fueled instability in global markets, kept oil prices high, and raised fears of inflation and economic recession. Forex traders said Brent crude—which hovers around $110 a barrel—continues to put pressure on oil-importing economies like India. Additionally, factors such as continued foreign capital outflows amid rising geopolitical uncertainties have further weakened investor confidence.
Rupee continues to fall
At the interbank foreign exchange market, the rupee opened at 94.95 against the US dollar, weakened thereafter, and finally ended the day at 95.23 (provisional)—a fall of 39 paise from its previous close. On Thursday, the rupee had closed at 94.84 against the US currency. Stock and currency markets remained closed on Friday on the occasion of Maharashtra Day. According to experts, the Indian Rupee has reached its all-time low as the dollar has strengthened and crude oil prices have remained stable. This continued rise in oil prices, coupled with the outflow of foreign funds, is clearly putting pressure on India’s trade balance and the broader economy. Dilip Parmar, Senior Research Analyst, HDFC Securities, said that sustained demand for the dollar is expected to remain under short-term pressure on the rupee, due to which the dollar may move further towards 95.35 to 95.70 levels against the rupee.
From dollar to stock market: bullish trend
Meanwhile, the dollar index—which measures the dollar’s strength against a basket of six currencies—was trading at 98.26, up 0.11 percent. Global oil benchmark Brent crude was trading at $109.65 a barrel in futures markets, registering a gain of 1.37 per cent. According to exchange data, foreign institutional investors (FIIs) sold shares worth ₹8,047.86 crore on Thursday. Talking about domestic equity markets, Sensex closed 355.90 points higher at 77,269.40, while Nifty rose 121.75 points to 24,119.30.
expert opinion
In a research note, IFA Global said investors’ focus was on vote counting for the West Bengal state elections, and added that a BJP victory would be a positive for domestic assets. However, this impact may not last long, as global geopolitics is expected to remain the main driver, which will have a direct impact on supply chains and industries. Meanwhile, Expenditure Secretary V Vijayanam said on Friday that the coming few quarters—and the next year—could see “significant stress points”. Speaking at the ICPP Growth Conference organized by Ashoka University, Vijayanam acknowledged that fiscal stress is indeed a reality; However, he also added that capital expenditure (capex) remains our top priority—a priority that we intend to maintain and ensure that it continues at the levels set out in the Budget.