Indian Rupee Weakens Against USD on Higher Oil Prices Amid US-Iran Tensions
The Indian Rupee started the week on a negative note against the US Dollar due to higher oil prices over the weekend.
US President Donald Trump's comments that additional military strikes against Iran are possible before the midterm elections pushed up oil prices, making it more expensive for India to import crude oil.
The Reserve Bank of India (RBI) has been actively intervening in forex markets to maintain a stable exchange rate and keep inflation under control. Analysts at MUFG expect the RBI to deliver a 50bps interest rate hike in the remaining year, but strategists at Commerzbank believe policymakers will likely maintain a cautious stance.
The USD/INR pair is up 0.15% to near 95.95 as of writing, and the MCX Crude Oil contract expiring on October 19 is up 2.22% to near Rs. 9,045.