Rupee Falls For Fifth Session, Opens At 94.22 Per U.S. Dollar Amid Oil Price Surge

The Indian rupee declined by 11 paise to open at 94.22 against the U.S. dollar on April 24, compared to the previous close of 94.11, marking its fifth consecutive session of losses, according to Reuters.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The currency has depreciated by over 1% during the week, reflecting sustained pressure from rising global crude oil prices and increased demand for the U.S. dollar.

Crude Oil Prices Drive Currency Weakness

Brent crude oil prices climbed to around $106 per barrel, gaining nearly 1% overnight and about 11% so far this week, according to Reuters. This spike in oil prices comes amid heightened tensions in West Asia, especially in the Strait of Hormuz region, an essential global oil trade artery.

With rising crude prices exerting more pressure on the Indian rupee since the country relies heavily on oil imports, with 85% of crude oil needs coming from imports, according to the government.

Weekly Rupee Performance And Driving Forces

The Indian rupee has dropped by about 1.3% over the past week and is down ₹2 from its recent peak of 92.50, suggesting a reversal in its upward momentum, according to Reuters.

Market participants indicated that the Reserve Bank of India has been intervening intermittently in the foreign exchange market to manage volatility. The central bank has been supplying dollars at multiple levels rather than defending a fixed exchange rate, as per Reuters.

Additionally, the U.S. dollar remained firm, supported by global uncertainties and elevated crude prices, which continued to weigh on emerging market currencies, including the rupee.

External Pressures Persist

There has been a rise in international oil prices owing to geopolitical issues in West Asia, and supply risks are related to the Strait of Hormuz. The persisting volatility has maintained oil prices at high levels, affecting the currencies.

The persistent appreciation of oil prices and the inflow of foreign exchange have exerted downward pressure on the rupee in the latest trading sessions, where its movements were strongly influenced by international energy markets.

The path of the Indian rupee remains dependent upon the performance of international commodity prices and foreign sector dynamics in further trades.