The Indian rupee opened flat at 96.25 against the US dollar on Thursday, 16 July, as elevated crude oil prices and weakening market sentiment continued to weigh on the domestic currency.
The rupee has remained under pressure after renewed US-Iran hostilities triggered another rally in crude oil prices, raising concerns over India’s import bill and inflation outlook.
So far this month, the local currency has declined 1.7% and is edging closer to its record low of 96.96 per US dollar, touched in May.
According to a Reuters report, the support the rupee had received from the Reserve Bank of India’s (RBI) recent measures aimed at boosting dollar inflows has largely dissipated, leaving the currency increasingly exposed to the impact of higher oil prices.
A currency trader quoted by Reuters said the rupee’s near-term outlook had improved when Brent crude retreated towards $70 per barrel and the RBI introduced steps to attract foreign currency inflows. However, the renewed surge in oil prices following the escalation in the Middle East has reversed that trend, putting fresh pressure on the domestic currency.
