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Rupee Plummets as Oil Prices Surge Past $100
9 Sep
Summary
- Indian rupee hit its lowest point in over a month.
- Crude oil prices neared $100 per barrel due to militant strikes.
- Reserve Bank of India intervened by selling dollars to support the rupee.
The Indian rupee depreciated significantly on Tuesday, reaching its lowest point in over a month. This sharp decline of 33 paise, closing at 94.81 to the dollar, was primarily fueled by a surge in crude oil prices to nearly $100 per barrel. The rise in oil prices was attributed to new militant strikes in the Strait of Hormuz.
Traders indicated that the Reserve Bank of India (RBI) intervened by selling dollars, likely around the 94.89 level, to prevent further depreciation. This intervention was described as not overly aggressive, as the pressure stemmed from external factors rather than domestic speculation. The currency had traded between 94.51 and 94.89 during the day.
This period of currency pressure was not isolated to India; other emerging market currencies also felt the strain. Both the Thai baht and the South African Rand saw declines of approximately 0.4% on Tuesday. Looking ahead, the Indian rupee is expected to trade within a range of 94.50 to 95.25 on Wednesday.
