Rupee Crashes After Early Gains, Hits Historic Low of 95.22 vs Dollar

The Indian rupee faced heavy pressure on Monday, erasing its early gains to hit a historic intra-day low of 95.22 against the US dollar. Rising crude oil prices, ongoing geopolitical tensions, and a strong dollar environment continue to weigh on the rupee, keeping volatility high in the currency market.

Despite a positive start, the rupee could not hold momentum as global and domestic factors combined to push it lower during the trading session.

Strong Opening Fades Quickly in Forex Market

The rupee opened on a firm note after the Reserve Bank of India reduced the net open position limit that banks can hold overnight to $100 million. This move initially boosted sentiment in the forex market.

At the interbank foreign exchange, the rupee opened at 93.62 and strengthened further to 93.57 against the US dollar, marking a gain of 128 paise from its previous close. However, the positive momentum was short-lived.

As the session progressed, the rupee reversed sharply and dropped 160 paise from its opening level, hitting an all-time intra-day low of 95.22 against the American currency.

Continued Weakness After Previous Session Losses

The rupee’s decline comes after a sharp fall in the previous trading session. On Friday, the currency had already slumped by 89 paise to close at a record low of 94.85 against the US dollar.

This continued downward trend highlights persistent pressure on the rupee, driven by both global economic conditions and domestic market movements.

Dollar Strength and Oil Prices Weigh on Rupee

Forex traders point out that the USD/INR pair remains under pressure due to a strong dollar index and rising crude oil prices. Safe-haven demand has kept the dollar index above the 100 mark, limiting any meaningful recovery in the rupee.

At the same time, geopolitical tensions have pushed oil prices higher, adding further strain on the currency. Brent crude surged amid fears of supply disruptions, increasing import costs for India and weakening the rupee further.

The dollar index, which measures the strength of the US dollar against a basket of six currencies, was trading slightly lower by 0.15 per cent at 100.30. Meanwhile, Brent crude was trading at $115.50 per barrel, up 2.60 per cent in futures trade.

Stock Market Decline Adds to Pressure

The weakness in the rupee was mirrored in the domestic equity markets. The BSE Sensex plunged 1,733.78 points to 71,849.44, while the Nifty 50 dropped 528.45 points to 22,291.15.

Adding to the negative sentiment, foreign institutional investors continued to offload Indian equities. Data shows that FIIs sold shares worth Rs 4,367.30 crore on a net basis on Friday, further impacting market stability.

Outlook: Rupee Faces Ongoing Volatility

With rising oil prices, a strong dollar, and global uncertainties, the rupee is likely to remain under pressure in the near term. Market participants will closely track geopolitical developments, crude oil trends, and foreign investment flows for further direction.

Unless external conditions improve, sustained recovery in the rupee may remain challenging in the current environment.