Rupee Weakens Against Dollar Amid Crude Price Hike and Geopolitical Tensions
The Indian rupee weakened by 13 paise to trade at 95.56 per US dollar on Monday morning due to rising crude oil prices and geopolitical tensions.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, market participants have raised the probability of a September Fed rate hike, pushing US Treasury yields higher and triggering a broad dollar rally.
The rupee's depreciation was also attributed to better-than-expected flows under the FCNR(B) scheme, which boosted investor sentiments. Additionally, Brent crude prices rose by 1.34% to $89.28 per barrel in futures trade due to concerns about oil flows through the Strait of Hormuz.
The Reserve Bank of India (RBI) is intervening in the market to stem any significant depreciation in the rupee, and foreign institutional investors offloaded equities worth ₹5,039.80 crore on a net basis on Friday.