Rupee Falls Despite Weaker Dollar Amid Oil Price Surge
The Indian Rupee (INR) has been declining against the US Dollar (USD) this week, despite the USD reaching a three-month low. The USD/INR pair edged up to near 95.72, with oil prices remaining elevated amid the US-Iran deadlock.
India relies heavily on oil imports, and high oil prices typically weigh down currencies from oil-importing economies. The MCX Crude Oil contract expiring on September 21 traded 0.6% higher at around Rs. 8,350, nearing its three-week high of Rs. 8,404.
Brown Brothers Harriman's Elias Haddad noted that the USD is down against all major currencies, with global stocks and bonds rising. However, he warned that the Treasury's intervention in the buyback operation has blurred the lines between improving market functioning and suppressing borrowing costs to contain fiscal stress.