The uptick came as a pause in the recent rally in crude oil prices and a modest improvement in global risk sentiment offered some support to the currency, which has remained under pressure in recent sessions.
Global cues were relatively favourable. Brent crude prices declined nearly 3% on Monday (March 16), while US equities advanced, the dollar weakened, and US Treasury yields eased—reversing trends seen after the escalation of tensions linked to the Iran conflict.
The drop in oil prices was partly attributed to some tankers resuming transit through the Strait of Hormuz and expectations of further strategic reserve releases by International Energy Agency (IEA) member countries.
However, the relief in oil prices appeared limited. In Asian trade, Brent crude futures recovered and were last quoted around $103.04 per barrel, indicating continued volatility in energy markets.
Geopolitical uncertainty remains a key overhang. US allies have resisted calls to deploy naval support for tanker movements in the Strait of Hormuz, drawing criticism from US President Donald Trump.
Analysts note that signals from both the US and Iran remain mixed, keeping the outlook for de-escalation unclear.
Market sentiment in Asia turned cautious, with US equity futures edging lower. Indian equities were also expected to open slightly weaker after Monday’s (March 16’s) rebound. Foreign institutional investors continued to withdraw funds, with outflows nearing $1 billion in the previous session.
Analysts say persistent risks from elevated oil prices could continue to weigh on the rupee. As India imports nearly 90% of its crude oil needs, higher prices tend to widen the trade deficit and fuel inflationary pressures.
–With Reuters inputs
