Mumbai: The Indian rupee extended its decline on Thursday, falling 25 paise to 95.33 against the US dollar in early trade as Brent crude remained above $100 a barrel, raising concerns over India's oil import bill and external finances.
Persistent dollar demand and geopolitical uncertainty surrounding the US-Iran conflict also kept the domestic currency under pressure.
Rupee Weakens Beyond 95
At the interbank foreign exchange market, the rupee opened at 95.15 before weakening to 95.33 against the dollar. It had closed 34 paise lower at 95.08 on Wednesday.
Anil Kumar Bhansali of Finrex Treasury Advisors said the rupee's move beyond the psychologically important 95 level triggered additional dollar demand and stop-loss activity. However, RBI intervention helped contain the decline.
The dollar index slipped 0.09% to 98.72.
Brent Crude Stays Above $100
Brent crude was trading 0.23% lower at $100.98 per barrel, but remained elevated amid US-Iran tensions and concerns over oil flows through the Strait of Hormuz.
India imports nearly 90% of its crude requirements, making the rupee particularly sensitive to global oil prices.
Amit Pabari of CR Forex Advisors estimated that every $10 increase in crude prices could add roughly $12-15 billion to India's annual import bill, potentially putting additional pressure on the current account and rupee.
USD-INR Eyes 95.50
Pabari said the temporary cushion from FCNR-related dollar inflows has largely faded. If USD-INR remains above 95, the currency pair could move towards 95.50 and potentially 96.00 if weakness persists.
Meanwhile, Sensex gained 38.07 points to 74,809.95, while Nifty rose 9.85 points to 23,439.20.
Foreign institutional investors sold Indian equities worth a net ₹582 crore on Wednesday, exchange data showed.
