By Nimesh Vora
MUMBAI, April 24 (Reuters) – The Indian rupee is set to extend its losing streak at Friday’s open, weighed down by a persistent rally in oil prices that has put the currency back under pressure after a brief respite.
The currency has fallen each day this week and there is little sign of relief ahead. The rupee is expected to open weaker in the 94.20–94.25 range, traders said, after settling at 94.1050 on Thursday.
It has tumbled about 1.3% so far this week and is nearly two big figures off recent highs, underscoring how quickly selling pressure has re-emerged following a relief rally that lifted the currency to 92.50.
The rupee’s slide this week has not been allowed to spiral unchecked, with traders pointing to repeated intervention by the Reserve Bank of India to limit downside pressure on the currency.
Bankers said the RBI has been offering dollars at multiple levels rather than drawing a hard line, indicating its intent to slow the currency’s decline.
The intention seems to be the manage the pace of the rupee’s decline, a currency trader at private sector bank said.
However, the intervention has had only a limited impact, with the dollar/rupee pair holding firm at higher levels and pulling in more dollar demand, he added.
OIL TO BLAME
The persistent pressure on the rupee this week has been largely driven by oil. Brent crude has surged nearly 18% to around $106 a barrel and briefly crossed $107 on Thursday for the first time in two weeks.
The rally shows little sign of cooling, with fears of renewed military escalation in the Middle East keeping risk premium high.
Iran released footage showing commandos boarding a cargo ship in the Strait of Hormuz, while reports that Tehran’s air defences had engaged “hostile targets” have added to market jitters.
(Reporting by Nimesh Vora; Editing by Sonia Cheema)
