The rupee opened 21 paise weaker at 93.71 against the US dollar on Wednesday, April 22, pressured by a renewed uptick in oil prices despite U.S. President Donald Trump announcing an indefinite extension of the ceasefire with Iran.
A spot FX trader told Reuters that Tuesday’s move has reversed the rupee’s short-term upward bias, noting that oil prices edging back toward $100 could limit any meaningful recovery in the currency.
The trader as per the Reuters news report mentioned that the Reserve Bank of India is not expected to permit the rupee to reach the 94 level in the near future. Although the currency faced pressure on Tuesday, dollar sales from state-operated banks indicate active intervention.
Brent crude prices dipped slightly to $98.28 during Asian trading, yet still held onto most of its significant 8.5% gain from the prior sessions, as markets seemed to overlook Trump’s extension of the ceasefire.
The decision seemed to be made unilaterally, with no immediate confirmation regarding whether Iran or Israel, a US ally, would agree to extend the truce that started two weeks ago.
Trump also mentioned that the US Navy would maintain its blockade of Iranian ports and coastlines, despite the uncertain outlook for peace negotiations.
