New Delhi: The Indian rupee recovered slightly but still ended lower against the US dollar on Thursday. The currency settled at 92.17 per dollar, down 16 paise from its previous close.
During the day, the rupee slipped to a record low of 92.36, its weakest level ever against the US dollar. However, it later recovered some ground before the market closed.
At the interbank foreign exchange market, the rupee opened at 92.25 against the dollar. It continued to fall during the day and touched the new record low before recovering slightly.
Earlier, the rupee’s previous lowest intra-day level was 92.35, recorded on March 9.
Rising Oil Prices Add Pressure
Experts said the rupee came under pressure mainly because of rising global crude oil prices and geopolitical tensions in West Asia.
Brent crude, the global oil benchmark, jumped 5.70 per cent to USD 97.22 per barrel in futures trade. Higher oil prices usually weaken the rupee because India imports a large amount of crude oil and needs more dollars to pay for it.
The ongoing conflict in the Middle East has increased uncertainty in global markets, which has also affected currency movements.
Strong Dollar And Market Volatility
A stronger US dollar index and weakness in the domestic stock market also weighed on the rupee.
The dollar index, which measures the strength of the US currency against six major global currencies, was trading 0.15 per cent higher at 99.38.
According to Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, the rupee weakened due to rising oil prices, foreign investor outflows and a stronger dollar.
He added that the rupee recovered slightly during the day on expectations that the Reserve Bank of India (RBI) may have intervened to support the currency.
Weak Domestic Markets Add Pressure
The Indian stock market also saw a sharp fall on Thursday.
The Sensex dropped 829.29 points, or 1.08 per cent, to close at 76,034.42. Meanwhile, the Nifty fell 227.70 points, or 0.95 per cent, to 23,639.15.
Foreign institutional investors (FIIs) also remained sellers in the market. Exchange data showed that they sold equities worth Rs 6,267.31 crore on Wednesday.
Outlook For The Rupee
Analysts believe the rupee may remain under pressure in the coming days due to high crude oil prices and global risk concerns.
According to Choudhary, the USD-INR pair is expected to trade in the range of Rs 91.70 to Rs 92.40 in the near term.
