Rupee back in red! Impact of RBI’s forex boost fades; currency breaches 96 versus dollar
The Indian rupee has depreciated past 96 against the US dollar due to rising crude oil prices and geopolitical tensions. Despite RBI intervention, the currency remains under pressure as investors shift toward safe-haven assets.
Why it matters
Currency volatility in India impacts inflation and the cost of imports, affecting the broader domestic economy.
The Indian rupee is back in the red after having appreciated in recent weeks due to Reserve Bank of India’s (RBI) measures and intervention. The currency has given up most of the gains it recorded after the RBI and the government announced a coordinated set of measures aimed at attracting foreign capital.Now, the renewed US-Iran tensions are driving crude oil prices higher, putting pressure back on the rupee. The domestic currency ended Monday at 95.62 against the dollar, its weakest closing level since June 8. On Tuesday, the currency started trading with a 48 paise fall versus US dollar, falling past the 96 level.Rupee resumes depreciationThe rupee has weakened by more than 0.8% so far in the current fiscal year. On Monday, the one-month forward premium on the rupee stood at 3.17%, whereas the one-year forward premium was 2.83%, according to an ET report.
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