The rupee touched a fresh record low against the US dollar. What global and domestic pressures are weighing on the currency, and how are equities and crude prices shaping investor sentiment this week?
The rupee slipped further on Thursday, hitting a new record low of 92.63 against the US dollar. The fall came as global factors weighed heavily on sentiment, with a stronger greenback and continued foreign capital outflows adding pressure.
At the interbank foreign exchange, the local unit opened at 92.42 against the dollar and traded between 92.46–92.47 before sliding to 92.63. This marked a fresh low after Tuesday’s session, when the rupee had already touched 92.47 intraday before settling at 92.40.
Global Pressures On Currency
Forex analysts pointed to elevated crude oil prices and escalating conflict in West Asia as key drivers of weakness. Brent crude was trading above USD 103 per barrel in futures trade, raising concerns over inflation and supply disruptions.
“The rupee hit a new low ahead of major central bank meetings, as the Reserve Bank of India allowed the 92.50 level to be breached,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which tracks the greenback against six major currencies, was up 0.05 per cent at 99.62, further strengthening the US currency’s appeal.
Equities Under Heavy Selling Pressure
Indian equity markets saw a sharp sell-off on Thursday. The BSE Sensex plunged over 1,600 points, while the Nifty 50 slipped below the 23,300 mark in intraday trade. Markets opened sharply lower after three consecutive sessions of gains, as tensions in the Iran war and the broader Middle East crisis rattled global sentiment.
At the opening bell, the Sensex dropped 1,953 points and the Nifty fell 453 points, slipping below key levels. The decline followed reports of Iran striking energy facilities in the Gulf, which pushed Brent crude prices above USD 110 per barrel. Fears of inflation and supply disruptions intensified the sell-off.
Losses spread across sectors, with benchmark indices extending declines during early trade. Shares of InterGlobe Aviation and Adani Ports and Special Economic Zone fell around 3 per cent each, ranking among the top losers.
