The Indian rupee weakened by 19 paise to open at 95.54 against the U.S. dollar, pressured by rising crude oil prices and a cautious global risk environment. Persistent dollar demand from importers and continued foreign fund outflows also weighed on the domestic currency.
According to a Reuters report, the rupee has lost momentum after staging a rally on Friday following the Reserve Bank of India’s (RBI) measures to attract foreign inflows. Bankers noted that sustained demand for dollars from importers, coupled with equity-related outflows, has offset much of the positive impact of the central bank’s initiatives.
As a result, the rupee is currently trading only about 0.2% stronger than its level prior to the RBI’s announcements, suggesting limited follow-through from the measures.
Foreign portfolio investors have remained heavy sellers of Indian equities, with outflows exceeding $6 billion so far this month, already surpassing the total amount withdrawn during the previous month. The combination of capital outflows, elevated oil prices, and geopolitical uncertainty continues to keep pressure on the local currency.
Rupee Outlook
Ponmudi R, CEO of Enrich Money, said the USD/INR pair is currently trading in the ₹95.40– ₹95.45 range, attempting to stabilise while facing technical resistance near a long-term ascending trendline.
According to him, immediate resistance lies at ₹95.50– ₹95.60, and a sustained move above this zone could negate the near-term bearish bias, paving the way for an advance toward ₹95.68– ₹95.77.
On the downside, the ₹95.30– ₹95.20 zone remains a crucial support area. A decisive break below these levels could accelerate losses toward ₹94.90, potentially breaching the long-term trendline, with the next significant support seen around ₹94.75.
Ponmudi added that the near-term outlook remains cautious, as a fragile geopolitical environment continues to support dollar demand, even as domestic policy measures provide some support to the rupee.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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