NEW DELHI– The Indian rupee weakened sharply on Monday, breaching the 95-per-dollar mark for the first time amid rising global oil prices and recent central bank measures.
The currency touched an intraday low of 95.2 against the U.S. dollar, down 0.3 percent, before settling at a record closing low of 94.83. It had closed at 94.81 on Friday.
The rupee has now declined 4.4 percent over the March quarter, reflecting sustained pressure from global and domestic factors. Despite opening stronger earlier in the session following regulatory action by the Reserve Bank of India (RBI), the currency reversed course and fell about 160 paise from its opening level.
The RBI had tightened rules on banks’ currency exposure, reducing the net open position limit they can hold overnight to $100 million. In a directive issued after market hours on Friday, the central bank said banks must comply with the limit by April 10, ensuring their net open rupee positions in the onshore deliverable market do not exceed the cap at the end of each business day.
Market estimates suggest such positions currently range between $25 billion and over $50 billion.
The rupee’s decline also comes amid mounting concerns over elevated crude oil prices, driven by escalating tensions in West Asia. Brent crude futures jumped 3 percent to an intraday high of $116.70 per barrel, nearing a fresh 52-week high, while U.S. benchmark West Texas Intermediate (WTI) rose more than 3 percent to cross $103 per barrel.
The currency had already fallen about 1 percent last week, marking its fourth consecutive weekly decline of similar magnitude.
Rising oil prices have also weighed heavily on Indian financial markets. Equities are on track for their worst monthly performance since March 2020, while bonds are heading toward their weakest fiscal year since 2023.
On Monday, the benchmark Sensex dropped 1,635.67 points, or 2.2 percent, to close at 71,947.55. The Nifty fell 488.20 points, or 2.14 percent, to settle at 22,331.40.
Foreign institutional investors remained net sellers, offloading equities worth Rs 4,367.30 crore on Friday, according to exchange data. (Source: IANS)
