The Indian Rupee weakened sharply by 56 paise to close at 93.39 (provisional) against the U.S. dollar on Monday, pressured by rising global uncertainties following the collapse of U.S.-Iran peace talks. The escalation in geopolitical tensions in West Asia triggered a surge in crude oil prices and increased demand for the U.S. dollar, putting additional strain on emerging market currencies, including the rupee.
At the interbank foreign exchange market, the rupee opened at 93.30 and traded within a range of 93.25 to 93.40 during the session before settling lower. The strengthening of the greenback was reflected in the dollar index, which rose 0.32% to 98.75, indicating broad-based demand for the U.S. currency.
Global oil prices also saw a significant spike, with Brent crude rising 7.69% to $102.52 per barrel in futures trade, amid concerns over supply disruptions following reports of potential U.S. action against Iranian ports. Higher oil prices typically widen India’s trade deficit, further weakening the rupee.
On the domestic front, equity markets mirrored the negative sentiment. The BSE Sensex dropped 702.68 points to close at 76,847.57, while the Nifty 50 declined 207.95 points to settle at 23,842.65. Despite this, Foreign Institutional Investors (FIIs) remained net buyers, investing ₹672.09 crore in equities.
Meanwhile, India’s forex reserves provided some relief, rising by $9.063 billion to $697.121 billion for the week ended April 3, according to the Reserve Bank of India.