The Indian Rupee depreciated by 32 paise to close at 93.48 against the US dollar on Tuesday, influenced by a strengthening American currency and volatile crude oil prices. Uncertainties surrounding the progress of West Asia peace negotiations also contributed to the decline.
Information was available with The Chenab Times that despite positive domestic equity markets, the local currency faced downward pressure. Forex analysts indicated that the Reserve Bank of India’s recent measures to ease curbs on speculative bets in non-deliverable forward markets also played a role.
On Monday, the Reserve Bank had partially withdrawn directives issued on April 1, which aimed to curb excessive speculation in the rupee. Initially, the banking regulator had capped net open positions in non-deliverable forward markets at USD 100 million, with banks required to comply by April 10. The revised directives permit authorised dealers or banks to resume offering non-deliverable derivative contracts involving the Indian Rupee to resident or non-resident users, subject to certain restrictions on related-party transactions. The USD 100 million cap on net open positions remains in effect.
At the interbank foreign exchange market, the rupee opened at 93.25 and touched an intra-day low of 93.63 before concluding the session 32 paise lower at 93.48 against the dollar. This followed a loss of 25 paise on Monday, when the rupee settled at 93.16 against the US dollar. The currency had seen a gain of 47 paise in the two preceding sessions.
Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, attributed the rupee’s fall to uncertainty surrounding US-Iran talks and a surge in crude oil prices. He noted that a strong dollar also exerted pressure, although positive global markets provided some cushion against a steeper decline.
Choudhary anticipates that traders will monitor US retail sales and ADP employment change data for directional cues. He projected that the USD-INR spot price is expected to trade within a range of Rs 93.30 to Rs 93.90.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six major currencies, registered a rise of 0.19 per cent, reaching 98.09. Brent crude, the global oil benchmark, traded 0.70 per cent lower at USD 94.81 per barrel in futures trade. Analysts pointed to persistent concerns over potential supply disruptions from the Strait of Hormuz as a factor contributing to volatility in crude prices. Additionally, the ceasefire agreement between the United States and Iran was scheduled to expire on Wednesday.
In related developments, Iran’s chief negotiator stated on Tuesday that Tehran would not negotiate under threat, while US President Donald Trump indicated he was not in a hurry to resolve the conflict with Iran. Domestically, the equity markets showed gains, with the 30-share Sensex rising by 753.03 points, or 0.96 per cent, to close at 79,273.33. The Nifty also advanced by 211.75 points, or 0.87 per cent, settling at 24,576.60.
Data from the exchanges revealed that Foreign Institutional Investors offloaded equities worth approximately Rs 1,059.93 crore on Monday.
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The Chenab Times News Desk
