Rupee Slumps to Lowest Level in Over a Month Amid Rising Oil Prices
The Indian rupee has weakened significantly against the US dollar, reaching its lowest level in over a month. On Tuesday, it closed at 95.92 against the US dollar, down by 38 paise from the previous day.
The decline is attributed to rising global oil prices and expectations of tighter monetary policy in the US. Brent crude prices surged above $100 a barrel amid heightened geopolitical tensions and concerns over global energy supplies.
India's dependence on imports to meet its crude oil requirements makes higher oil prices particularly detrimental to the country's economy. The rupee's decline also coincided with expectations of a 25-basis-point interest rate increase by the US Federal Reserve, which can strengthen the dollar and reduce the appeal of emerging-market assets.
The Reserve Bank of India likely intervened in the currency market through state-run banks by selling dollars to limit excessive volatility. Despite intervention, the rupee remained under pressure due to unfavorable global market conditions.