The currency has declined nearly 1% so far this week and has moved away from recent highs of around 92.50 per dollar, levels it had reached following support measures by the Reserve Bank of India late last month and earlier in April.
Market participants indicated that the rupee faced immediate pressure at the open, with some traders expecting the 94-per-dollar level to be breached early in the session. The recent appreciation from 95 to 92.50 is now being viewed by some in the market as a temporary recovery rather than a sustained trend reversal.
Traders said the central bank has been intervening in the foreign exchange market by selling dollars in recent sessions to curb volatility. However, persistent demand for dollars from oil marketing companies and limited dollar supply have continued to weigh on the currency.
While such intervention has moderated the pace of depreciation, it has not reversed the broader weakening trend in the rupee.
Global factors have also contributed to the pressure. Brent crude oil prices rose above $100 per barrel for the first time in over two weeks, settling at $103.24 on Wednesday (April 23). The increase follows stalled talks between the United States and Iran and ongoing restrictions affecting shipments through the Strait of Hormuz, raising concerns about supply disruptions.
Analysts note that continued firmness in crude oil prices could add to inflationary pressures and further strain the rupee, given India’s reliance on oil imports.
–With Reuters inputs
