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Rupee Tumbles Amidst Oil Surge & Fund Outflows
13 Jan
Summary
- Rupee fell 4 paise to 90.21 against the dollar.
- High crude oil prices and foreign fund outflows pressured the rupee.
- Geopolitical tensions and weak equity markets also impacted the currency.
The Indian rupee depreciated by 4 paise on Tuesday, concluding the trading session at 90.21 against the US dollar. This decline was significantly influenced by a surge in crude oil prices, a strengthening US dollar, and consistent outflows of foreign investment. Geopolitical uncertainties and a weak performance in domestic equity markets also contributed to the pressure on the rupee.
Analysts attribute the rupee's fall to ongoing geopolitical tensions and a general trend of global risk aversion. The combination of weak domestic markets, substantial foreign institutional investor (FII) outflows amounting to ₹3,638.40 crore on Monday, and rising crude oil prices have collectively weighed down the currency. However, optimism regarding a potential India-US trade deal and expectations of a rate cut due to weak US labor market reports may offer support at lower levels.
Market sentiment saw a brief improvement following statements from the new US envoy to India, Sergio Gor, indicating active engagement on a trade deal. Meanwhile, the dollar index saw a marginal increase, and Brent crude oil prices traded higher. India's retail inflation rose to 1.33% in December, below the RBI's tolerance level, while direct tax collections showed an 8.82% growth in the current fiscal year.
