GG News Bureau
Mumbai, 16th April. The Indian rupee weakened to a historic low against the US dollar amidst escalating tensions between Iran and Israel. Early trade on Tuesday saw the rupee depreciating by 9 paise to reach 83.53 against the dollar, influenced by a robust American currency and surging crude oil prices.
Forex analysts attributed the rupee’s decline to a combination of factors, including negative trends in domestic equities and ongoing foreign fund outflows, which dampened investor confidence.
In interbank foreign exchange, the rupee commenced trading at 83.51 against the dollar, touching a low of 83.53, marking a 9 paise fall from its previous close. This downward trend follows Monday’s depreciation of 6 paise, closing at 83.44 against the US dollar.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, remarked on the rupee’s slide, citing increased dollar buying by foreign portfolio investors amidst geopolitical uncertainties in the Middle East and rising US yields. He emphasized the importance of monitoring the Reserve Bank of India’s response to counter the rupee depreciation.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, stood at 106.34, indicating a 0.13% increase.
Brent crude futures, the global oil benchmark, surged by 0.53% to USD 90.58 per barrel, as tensions between Israel and Iran escalated, fueling concerns about supply disruptions in the Middle East.
On the domestic front, the benchmark BSE Sensex traded lower by 307.44 points, or 0.42%, at 73,092.34 points, while the NSE Nifty declined by 76.50 points, or 0.34%, to 22,196.00 points.
Foreign Institutional Investors (FIIs) continued to be net sellers in the capital markets on Monday, offloading shares worth ₹3,268.00 crore, according to exchange data.
In macroeconomic news, wholesale inflation in India rose marginally to a three-month high of 0.53% in March, driven by increased prices of vegetables, potato, onion, and crude oil. Additionally, India’s merchandise exports saw a slight dip in March to USD 41.69 billion, with a 3.11% decline during the last fiscal year, primarily attributed to geopolitical uncertainties and sluggish global trade.
