The Indian Rupee witnessed sharp volatility on Monday, breaching the 95 per US dollar mark during intra-day trading before settling at 94.78 (provisional) against the greenback. The fluctuation came amid heightened global uncertainty triggered by the ongoing West Asia conflict, which has entered its 31st day and continues to unsettle financial and energy markets.
At the interbank foreign exchange market, the rupee opened stronger at 93.62 and even touched 93.57, gaining significantly from its previous close. This initial rise was supported by a move from the Reserve Bank of India, which reduced the net open position limit that banks can hold overnight to $100 million, boosting short-term sentiment. However, the currency later reversed gains due to persistent risk-off sentiment and rising crude oil prices.
Forex traders reported extreme volatility, with the USD/INR pair swinging nearly 165 paise during the session. The pressure on the rupee was further intensified by surging crude prices, as Brent Crude climbed to $114.97 per barrel, reflecting supply concerns linked to geopolitical tensions.
On the global front, the dollar index slipped slightly by 0.15% to 100.30, though it remained relatively strong. Meanwhile, domestic equity markets also faced heavy selling pressure. The BSE Sensex plunged 1,635.67 points to close at 71,947.55, while the NSE Nifty dropped 488.20 points to settle at 22,331.40.
Market experts noted that continued geopolitical tensions and foreign institutional investor outflows could keep the rupee under pressure in the near term.