The rupee on Monday breached the 95-per-USD mark in intra-day trade before settling at Rs 94.78 (provisional) against the American currency, as the West Asia conflict entered its 31st day and global markets turned sharply risk-averse.
Union finance minister Nirmala Sitharaman, however, said the country’s economic fundamentals remain strong and insisted the Indian currency is “absolutely going fine” compared with other emerging market peers — a comforting assessment delivered at a moment when the rupee is hovering near historic lows and oil prices are climbing fast enough to keep import bills firmly stressed.
Forex traders said the USD/INR pair swung 165 paise during intra-day trade, reflecting heightened volatility triggered by geopolitical uncertainty and rising crude prices. Brent crude climbed to USD 114.97 per barrel, up 2.60 per cent, as fears of supply disruptions returned to the forefront of global markets.
At the interbank foreign exchange, the rupee opened stronger at 93.62 and rose further to 93.57, gaining 128 paise from its previous close after the Reserve Bank of India moved to tighten currency risk exposure for banks. In a circular dated 27 March, the RBI capped the Net Open Position (NOP-INR) that banks can hold overnight at USD 100 million, with compliance required by 10 April.
The early optimism proved fleeting. The rupee soon reversed course, falling to an all-time intra-day low of 95.22 against the US dollar before closing at Rs 94.78, just 7 paise stronger than Friday’s historic close of Rs 94.85. On Friday alone, the currency had slumped 89 paise.
