The rupee opened 6 paise lower at 95.66 against the US dollar on Tuesday, 18 August, as rising crude oil prices and US bond yields added to pressure on the currency. The rupee was also weighed down by the RBI’s recent decision to advance the deadline for its foreign-currency deposit swap facility for non-resident Indians.
Brent crude rose above $91 a barrel, while the 30-year US Treasury yield climbed to its highest level in more than two decades, increasing pressure on emerging-market currencies.
The US-Iran truce expired, with Tehran signalling a shift towards a “fully offensive” military posture, raising concerns over global energy supplies and pushing oil prices higher. According to a Reuters report, US President Donald Trump also told a Fox News reporter that Iran should surrender.
The rise in crude prices contributed to higher US Treasury yields, further tightening financial conditions for the rupee.
The currency came under additional pressure after the RBI shortened the foreign-currency deposit swap facility window by one month to 31 August. The move, which surprised several bankers, pushed the rupee below the 95.50 level on Monday despite broad dollar weakness, while central bank intervention failed to prevent further depreciation.
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