Mumbai: The Indian rupee remained under pressure against the US dollar on Friday, weakening 27 paise in early trade as elevated crude oil prices and continued foreign portfolio outflows weighed on the domestic currency.
At the interbank foreign exchange market, the rupee opened at 95.70 against the US dollar before slipping further to 95.79, down 27 paise from its previous close.
The domestic currency had fallen 44 paise to settle at 95.52 against the dollar on Thursday.
Crude Oil Keeps Rupee Under Pressure
The biggest concern for the USD-INR exchange rate remains expensive crude oil, which threatens to increase India's import bill.
Brent crude was trading 0.76% lower at $108.45 per barrel, but remained at elevated levels amid escalating US-Iran tensions and concerns over possible disruptions to oil supplies through the Strait of Hormuz.
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, said pressure on the rupee continues, with the currency remaining vulnerable beyond the 95 level.
He said the rupee could move towards 96 against the dollar, while 95 may now act as a support level.
RBI Intervention Offers Support
India's record foreign exchange reserves, active Reserve Bank of India intervention and robust domestic economic growth of 7.8% provide support to the currency.
However, higher global bond yields, expensive crude and foreign portfolio outflows continue to dominate the near-term outlook.
The dollar index, which measures the greenback against six major currencies, rose 0.12% to 99.16.
Foreign Institutional Investors sold Indian equities worth a net ₹438.24 crore on Thursday.
Meanwhile, domestic equities remained under pressure. The Sensex plunged 628.24 points to 74,257.69 in early trade, while the Nifty dropped 221.20 points to 23,255.10.
Investors will now closely track upcoming US and Indian inflation data for further direction on currencies and interest rates.
