Rupee Struggles Near 96 as Oil Prices and Foreign Selling Persist
The Indian rupee has remained close to the 96-paise mark against the US dollar, as persistent foreign selling and elevated crude oil prices continue to exert pressure on the currency. On Monday, the rupee opened at 96.20 per dollar before slipping further to 96.26, marking a slight decline from its previous close. The Reserve Bank of India (RBI) has been actively intervening to curb excessive volatility, but the persistent strength of the US dollar and rising import costs continue to weigh on the rupee.
The rupee's recent decline follows a sharp drop on Thursday, when it closed at 96.25 per dollar, breaching the psychologically significant 96-level for the first time in over two months. Analysts suggest that the rupee's weakness is likely to persist as long as oil prices remain above $100 per barrel, US Treasury yields stay high, and foreign portfolio investors continue to sell equities.
The RBI's interventions have been evident in the country's foreign exchange reserves, which fell by $18 billion to $748 billion. The central bank's monetary policy committee is set to meet this week, with economists widely expecting a 25 basis point rate hike to 5.50%. Markets are also closely monitoring developments such as US services data, Federal Reserve minutes, and any potential damage reports from Saudi Arabia.
Foreign selling remains a significant pressure point for the rupee. On Thursday, foreign investors offloaded equities worth Rs 9,484.22 crore. Despite this, the Indian stock markets opened on a positive note, with the BSE Sensex rising 413 points to 72,315 and the NSE Nifty gaining 131.55 points to 22,554.20.