Indian rupee touched a record low on Thursday amid a fresh surge in crude prices and a stronger dollar. The local currency fell 0.3% to 92.3575, eclipsing its previous lifetime low of 92.3475 hit earlier this week.
The fall in rupee coincides with the weakness in other Asian currencies that fell across the board against the greenback. At the interbank foreign exchange, the rupee opened lower at 92.25 against the US dollar and slipped further to 92.35 as compared to its previous close of 92.01.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.24% higher at 99.47.
Crude Oil Price Surge
A sharp rise in crude oil prices has reignited concerns over the economic impact of potential energy supply disruptions. As a major importer of crude oil, India faces the risk of widening twin deficits — the fiscal deficit and the current account deficit — amid rising oil prices, thus weighing on the local currency.
In the latest developments on the US-Iran war, Iran stepped up attacks on oil and transport facilities across the Middle East, causing Brent crude oil prices climbing to $100 per barrel. The Islamic Republic has also warned the world to brace for oil at $200 a barrel.
Stock Market Today
Rising oil prices have stoked inflation fears and dented investors’ risk-appetite. The Indian stock market crashed again, following weakness in global equities on Thursday.
The benchmark BSE Sensex was down 528.47 points, or 0.69%, at 76,335.24, while the NSE Nifty 50 declined 171.40 points, or 0.72%, to 23,693.85.
Bond Yields
Indian government bonds also fell, wiping out gains from the previous two sessions as a sharp spike in oil prices and a slump in US Treasuries triggered a selloff.
The benchmark 6.48% 2035 bond yield was up 3 basis points at 6.6677%, after hitting a high of 6.6940%. Meanwhile, the 10-year US yield neared 4.25% amid rising oil prices.
Rupee Outlook
The USD/INR pair is currently trading near the 92.00–92.50 zone, reflecting continued pressure on the Indian rupee.
“The chart structure remains bullish, supported by an upward trend and a pattern of higher highs and higher lows in recent months. A sustained move above 92.30 could strengthen bullish momentum toward fresh record highs. On the downside, 91.80 – 91.60 acts as immediate support, and a break below this zone may trigger short-term profit booking, although the broader bias remains positive amid global uncertainties,” said Ponmudi R, CEO of Enrich Money.
Jigar Trivedi, Senior Research Analyst at IndusInd Securities said that outlook for the USDINR pair is bullish.
“RBI may intervene in the forex market to stabilize the price movement. Support for the USINR pair is seen at 92 – 91.8, while resistance is placed at 92.4 – 92.5 – 92.6 levels,” said Trivedi.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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