The Indian rupee weakened by 19 paise to open at 95.54 against the U.S. dollar, pressured by rising crude oil prices and a cautious global risk environment. Persistent dollar demand from importers and continued foreign fund outflows also weighed on the domestic currency.
According to a Reuters report, the rupee has lost momentum after staging a rally on Friday following the Reserve Bank of India’s (RBI) measures to attract foreign inflows. Bankers noted that sustained demand for dollars from importers, coupled with equity-related outflows, has offset much of the positive impact of the central bank’s initiatives.
As a result, the rupee is currently trading only about 0.2% stronger than its level prior to the RBI’s announcements, suggesting limited follow-through from the measures.
Foreign portfolio investors have remained heavy sellers of Indian equities, with outflows exceeding $6 billion so far this month, already surpassing the total amount withdrawn during the previous month. The combination of capital outflows, elevated oil prices, and geopolitical uncertainty continues to keep pressure on the local currency.
