The Indian rupee extended its losing streak for an eighth consecutive session on Tuesday, falling 50 paise to close at a record low of 96.70 against the US dollar. The decline was driven by elevated crude oil prices, persistent foreign fund outflows, and a stronger dollar amid global risk aversion, according to the Press Trust of India.
Rupee's Performance and Market Context
The rupee has emerged as Asia's worst-performing currency, declining by Rs 2.48 or 2.64 per cent over the last eight trading sessions from its closing level of 94.22 on May 7. Forex traders attributed the sharp depreciation to rising crude prices and global supply-chain disruptions linked to the closure of the Strait of Hormuz.
At the interbank foreign exchange market, the rupee opened at 96.38 against the US dollar and touched an intraday high of 96.27 during the session. The currency eventually settled at its historic closing low of 96.70, down 50 paise from Monday's close of 96.20.
Analyst Insights
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said a stronger dollar and rising US treasury yields amid continuing geopolitical tensions and foreign institutional investor outflows pressured the rupee. However, he noted that any intervention by the Reserve Bank of India and certain restrictions on the import of gold and silver may support the rupee at lower levels. Choudhary expects the USD-INR spot price to trade in a range of 96 to 96.60.
Global Factors
The dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.05 per cent higher at 99.24 amid continuing Iran-related tensions. Brent crude, the global oil benchmark, was trading 1.92 per cent lower at $109.95 per barrel in futures trade.
Traders said emerging market economies, including India, remain under pressure from higher crude prices, as elevated oil rates accelerate dollar outflows and intensify foreign portfolio investor withdrawals.
Geopolitical Developments
Meanwhile, US President Donald Trump said he had halted fresh strikes on Iran following requests from Qatar, Saudi Arabia, and the UAE, while indicating that discussions with Tehran were progressing.
Domestic Equity Market
On the domestic equity front, the Sensex declined 114.19 points to close at 75,200.85, while the Nifty fell 31.95 points to settle at 23,618. Foreign Institutional Investors turned net sellers after three sessions of buying and sold equities worth Rs 2,457.49 crore on Tuesday, according to exchange data.
