Rupee slides 34 paise to 94.12 against US dollar in early trade amid oil surge

The Indian rupee extended its sharp decline for the fourth consecutive session on Thursday, slipping past the 94-per-dollar mark amid a fresh surge in global crude oil prices and escalating geopolitical tensions in West Asia . The sustained weakness reflects a combination of external shocks and persistent capital outflows that continue to weigh on the domestic currency.

At the interbank foreign exchange market, the rupee opened weak at around 94 against the US dollar and fell further to trade near 94.12 in early deals. The currency has now lost nearly 1 per cent this week alone, marking its worst losing streak in recent months. The continued fall highlights growing volatility in currency markets and rising demand for the US dollar .

The primary trigger behind the latest fall has been the sharp spike in Brent crude , which climbed above the $100 per barrel mark. The rally in oil prices has been driven by heightened tensions in the Strait of Hormuz , a key global energy corridor, where fears of supply disruptions have intensified.

Market sentiment has been further dented by stalled peace talks between the United States and Iran. Despite an extension of the ceasefire, uncertainty remains over the resumption of negotiations. Former US President Donald Trump indicated that the ceasefire has been extended, but there is no clear breakthrough, keeping investor sentiment fragile.

For India, which is heavily dependent on oil imports, higher crude prices translate into increased import bills and rising inflationary pressures , thereby weakening the rupee. Analysts warn that sustained high oil prices could widen the trade deficit and complicate the macroeconomic outlook.

Adding to the currency’s woes is the continued withdrawal of foreign funds. Foreign institutional investors have remained net sellers, triggering equity sell-off in domestic markets and putting additional pressure on the rupee. This trend reflects a broader shift toward safe-haven assets amid global uncertainty.

Domestic equity benchmarks also mirrored the negative sentiment. The Sensex and Nifty declined sharply in early trade, tracking weak global cues and rising risk aversion. Market participants remained cautious due to elevated risk appetite concerns and uncertain global developments.

Despite earlier efforts by the Reserve Bank of India to stabilise the currency through intervention measures , the rupee has come under renewed pressure. The central bank’s actions had briefly supported the currency, but external factors have once again dominated market direction.

Experts believe the near-term outlook remains uncertain. Much will depend on oil price trends, global liquidity conditions , and geopolitical developments. Any escalation in tensions or disruption in energy supplies could keep the rupee under sustained pressure in the coming sessions.