Rupee weakens by 11 paise against dollar amid oil surge

The Indian rupee opened at 94.22 against the US dollar on Friday (April 24), weakening from Thursday’s (April 23’s) close of 94.11, as a continued rise in global oil prices kept pressure on the currency.The rupee has fallen about 1.3% so far this week and is nearly two rupees weaker from its recent high near 92.50, indicating a renewed bout of selling after a brief recovery phase.

Market participants said the Reserve Bank of India has been intervening intermittently to curb excessive volatility. Traders noted that the central bank has been supplying dollars at multiple levels rather than defending a specific threshold, signalling an effort to moderate the pace of depreciation.
Despite these measures, the dollar/rupee pair has remained elevated, supported by persistent demand for the US currency, suggesting that the impact of intervention has been limited.The pressure on the rupee has been largely attributed to a sharp rally in crude oil prices. Brent crude oil has risen nearly 18% this week to around $106 per barrel and briefly crossed $107 in the previous session, marking its highest level in two weeks.

The uptrend in oil prices has been driven by geopolitical tensions in the West Asia, including reports of maritime activity in the Strait of Hormuz and heightened military alerts, which have kept risk premiums elevated and weighed on oil-importing currencies such as the rupee.

–With Reuters inputs