Rupee Slumps as Brent Crude Nears USD 90 Due to Strait of Hormuz Uncertainty

The Indian rupee has fallen 6 paise to 95.42 against the US dollar in early trade on Wednesday, weighed down by the sharp rise in Brent crude prices towards USD 90 per barrel.

Forex traders attribute the increase in Brent crude prices to the uncertainty over the Strait of Hormuz, with markets growing increasingly skeptical about a quick US-Iran agreement and reports of attacks on shipping renewing concerns about physical supply.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, notes that the rupee opened at 95.40 before slipping further to 95.42, down 6 paise from its previous close.

Brent crude is trading higher by 1% at USD 89.80 per barrel in futures trade, with Bhansali predicting that INR/USD could reach 95.50 if oil prices remain elevated.