slid to a fresh all-time low of 96.61 against the on Tuesday, extending its losing streak to a sixth consecutive session, as elevated crude oil prices and persistent dollar demand continued to weigh on the domestic currency. USD-INR settled at 96.53 for the day.
Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, attributed the decline to multiple external pressures.
“Rupee traded weaker by around 10 paise near 96.53, as elevated crude oil prices and continued pressure on capital flows kept the currency under stress. Sustained higher crude prices are increasing concerns over India’s import bill and widening trade deficit, which is keeping sentiment weak for the rupee,” he said.
Trivedi added that market participants continue to prefer dollar buying and rupee selling as a hedge against ongoing volatility, projecting a near-term trading range of 96.25–97.00 for the rupee.
Intervention by the Reserve Bank of India and recent government policy measures offered only limited support. Ponmudi R, CEO of Enrich Money, a SEBI-registered wealth-tech firm, noted that geopolitical uncertainty and firm energy prices were driving sustained dollar demand, intensifying concerns around India’s import bill and inflation outlook.
On equity markets, the Nifty 50 closed marginally lower at 23,618, down 0.1 per cent, though broader markets outperformed with the Midcap100 and Smallcap100 gaining 0.8 per cent and 1 per cent respectively.
The IT sector benefited from the weaker rupee, with the Nifty IT index rising 5.7 per cent over the last two trading sessions. The pharmaceutical sector, given its significant export exposure, is also expected to remain in focus due to currency-led tailwinds.
Foreign Institutional Investors turned net buyers, but analysts cautioned that rupee weakness and elevated crude prices would likely keep overall market momentum capped in the near term.