Spike in global oil prices and strong demand for the greenback from importers weigh on the Indian currency; analysts see potential RBI intervention if volatility rises.
The Indian rupee plunged to a record low against the US dollar on Monday, pressured by a sharp surge in global crude oil prices and rising demand for the greenback from importers.
The rupee opened at 92.20 against the US dollar and slipped further to 92.52 in early trade, marking its weakest level on record. The fall comes amid growing volatility in global commodity and currency markets.
Market participants said the sharp rise in crude oil prices has significantly increased demand for dollars from Indian oil importers, putting pressure on the domestic currency. Global crude prices surged nearly 25 per cent on Monday, touching around $116 per barrel, amid escalating geopolitical tensions in West Asia and concerns over potential supply disruptions.
India, which imports more than 80 per cent of its crude oil requirements, is particularly vulnerable to spikes in oil prices. Higher crude prices typically widen the country’s trade deficit and increase dollar demand, weakening the rupee.
Currency expert K N Dey said the rupee opened with a notable gap compared with Friday’s closing levels, reflecting heightened pressure in the forex market.
“Rupee opened with a gap of around 46 paise from Friday’s closing level near 92.20. If volatility intensifies further, intervention by the Reserve Bank of India could act as a quick breaker, potentially stabilizing the rupee and preventing further depreciation against the US dollar.
Market analysts also pointed out that technical indicators currently favour further strength in the US dollar against the rupee.
Ponmudi said the USD/INR chart structure remains bullish, supported by an upward trend characterised by consistent higher highs and higher lows in recent months.
“A sustained move above the 92.30–92.32 range could extend the rally toward higher levels,” he said.
However, analysts added that the 91.90–92.00 zone could act as immediate support for the rupee. A break below this level may trigger short-term profit booking or possible intervention by the Reserve Bank of India, even though the broader trend remains in favour of the US dollar.
Currency markets are also closely tracking global developments, particularly rising geopolitical tensions and fluctuations in energy markets, which have strengthened the dollar globally and increased volatility in emerging market currencies.
With crude oil prices remaining elevated and global risk sentiment fragile, analysts expect the rupee to remain under pressure in the near term.
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