Rupee Watch: Rupee hits fresh record low as oil surge, Iran tensions pressure Asian currencies — Actualités TradingView

The Indian rupee opened at a fresh record low against the dollar on May 18 as rising crude oil prices, escalating Iran tensions and sustained foreign fund outflows continued to pressure emerging market currencies.

At 9:05 am, the rupee was trading at fresh record of 96.18 against the dollar, down 0.21 percent from Friday’s close of 95.97. This marked the seventh straight session of decline for the domestic currency.

The latest weakness came amid a sharp rise in global oil prices, with Brent crude trading above $111.50 a barrel, intensifying concerns around inflation and India’s external balance.

Market participants said the rupee remains particularly vulnerable because higher oil prices significantly increase dollar outflows for crude imports at a time when foreign portfolio investor outflows are also continuing.

“With the rise in dollar index due to simmering Iran tensions, the dollar index has risen to 99.36 while Asian currencies are broadly weaker against the dollar,” market participants said.

Finrex said reopening of the Strait of Hormuz remains critical for stabilising the rupee.

“Only stoppage of the war and reopening of the Strait of Hormuz can bring lower demand for the dollar-rupee pair. Otherwise, 100 seems possible if RBI does not announce measures to increase dollar inflows into the country,” the brokerage said.

India also tightened rules for silver imports over the weekend as part of broader efforts to preserve foreign exchange reserves and defend the rupee after the currency weakened to all-time lows.

Asian currencies broadly traded lower during the session. The Malaysian ringgit declined 0.56 percent, Indonesian rupiah fell 0.46 percent and the South Korean won weakened 0.45 percent. The Taiwan dollar slipped 0.29 percent, while the Thai baht, Japanese yen, Singapore dollar and Chinese offshore yuan also traded lower.