Mumbai, Sept 7: The rupee fell 7 paise to close at Rs 94.50 against the US dollar on Monday, pressured by rising crude oil prices and weakness in domestic equities. The currency had closed at Rs 94.43 against the US dollar in the previous session.
The decline came despite continued intervention by the Reserve Bank of India (RBI) in the foreign exchange market. Market participants said the central bank’s dollar sales helped contain volatility and prevented a sharper fall in the domestic currency.
Rising crude oil prices remain a key headwind for the rupee as India depends heavily on imports to meet its energy requirements. Higher oil prices increase the country’s import bill and raise demand for US dollars, putting additional pressure on the domestic currency.
Brent crude prices rose amid heightened geopolitical tensions and concerns over potential disruptions to global energy supplies. Developments around the Strait of Hormuz have also added to uncertainty in the oil market.
The RBI has increased its presence in the foreign exchange market in recent weeks to limit excessive volatility in the rupee. Traders said the central bank intervened through state-run banks as the currency came under pressure.
The intervention reflects the RBI’s approach of managing sharp movements in the exchange rate rather than targeting a specific level for the rupee. The central bank’s dollar sales can help meet demand for foreign currency and reduce volatility during periods of heightened market stress.
Going ahead, the rupee is likely to remain sensitive to crude oil prices, geopolitical developments and movements in the US dollar. Continued RBI intervention could help limit sharp swings, although sustained increases in energy prices could keep pressure on the domestic currency.
