Mumbai: The Indian rupee breached the 96 mark against the US dollar in early trade on Thursday, pressured by global sentiment, high crude oil prices and a stronger currency.
The domestic unit opened at 95.88 at the interbank foreign exchange market before falling 19 paise to 96.10. This was its weakest level since July 24 and marked the first breach of 96 in over two months.
RBI intervention supports rupee
The rupee later recovered and touched 95.81, gaining 10 paise from its previous close. Traders suspected intervention by the Reserve Bank of India helped limit the currency’s losses.
On Wednesday, the rupee closed three paise lower at 95.91, extending its decline for a seventh session. The currency has weakened by 148 paise, or more than 1.4%, since closing at 94.43 on September 4.
Fed rate hike lifts dollar
The US Federal Reserve raised interest rates by 25 basis points, its first increase in three years. The move strengthened the dollar and added pressure on emerging-market currencies, including the rupee.
The dollar index, which measures the greenback against six currencies, rose 0.10% to 100.07.
Crude oil remains elevated
Brent crude declined 0.26% but remained high at $105.55 per barrel. India’s dependence on imported crude makes expensive oil a concern for the trade deficit and rupee.
Global uncertainty also increased after the US House of Representatives passed a bill allowing sanctions on Russia and steep tariffs on countries buying Russian oil and gas, including India and China.
Domestic equities provided some support. The Sensex gained 183.42 points to 74,519.87, while the Nifty rose 71.45 points to 23,288.65.
Foreign institutional investors sold Indian equities worth ₹2,032.61 crore on Wednesday, adding pressure on domestic financial markets.
