Rupee Dips vs USD: Oil Spike, Fed Hike Fears Impact Indian Currency
By ThePip Desk
Indian Rupee weakens to 95.44 against USD due to rising Brent crude prices and anticipation of a Federal Reserve rate hike. Learn more.
The Indian rupee opened marginally weaker against the US dollar on Monday, trading at 95.44. This marked a 1-paisa depreciation from its previous close of 95.43 on Friday.
Key Numbers
- Current Rupee Level: 95.44
- Weakened By: 1 paisa
- Previous Close (Friday): 95.43
- Intraday High: 95.56
- Intraday Low: 95.4050
Multiple factors contributed to the rupee’s downturn in early trade. A significant spike in Brent crude prices, triggered by a US strike on Iran’s Larak Island, exerted considerable pressure on the domestic currency.
Driving Factors
- Market expectations of a Federal Reserve rate hike as early as next month, following hawkish remarks from Fed Chair Kevin Warsh.
- Weak domestic equities, stemming from consistent foreign fund outflows.
Foreign institutional investors (FIIs) notably offloaded equities on Friday. Exchange data confirmed these investors sold holdings worth a net Rs 5,039.80 crore.
Despite these pressures, the rupee’s decline was somewhat contained. Persistent foreign-currency inflows provided support, while interventions from the Reserve Bank of India (RBI) actively limited further downside.