Rupee Under Pressure From Crude Surge, Closes at ₹96.57 Against US Dollar

The Indian rupee declined 4 paise to close at ₹96.57 (provisional) against the US dollar on Thursday, weighed down by elevated crude oil prices amid escalating tensions in West Asia. However, possible intervention by the Reserve Bank of India (RBI) helped limit the domestic currency's losses, according to forex traders.

At the interbank foreign exchange market, the rupee opened at ₹96.53 against the US dollar and moved in a narrow range of ₹96.45 to ₹96.59 during the session. It eventually settled at ₹96.57, compared with Wednesday's close of ₹96.53, when the currency had weakened by 28 paise.

"The rupee traded with a negative bias on weak domestic markets and surge in crude oil prices," Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said. He noted that crude prices continued to rise amid the ongoing conflict involving the US and Iran, while diplomatic talks could prevent a sharper decline in the rupee.

Choudhary said the USD-INR spot rate is expected to trade between ₹96.30 and ₹96.85.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the sharp rise in Brent crude following the escalation of the West Asia conflict was a key negative factor for the rupee. He also pointed to concerns over attacks affecting oil shipments and said RBI intervention could prevent a sharp depreciation in the domestic currency.

The dollar index, which measures the greenback's strength against six major currencies, was flat at 101.12. Brent crude futures rose 2.21% to $96.15 per barrel, amid concerns over the security of oil shipments through the Red Sea and the Strait of Hormuz.

Domestic equities also remained under pressure. The Sensex fell 363.66 points to 76,391.39, while the Nifty declined 126.65 points to 23,869.60. Foreign Institutional Investors were net sellers of Indian equities worth ₹819.20 crore on Wednesday.