Rupee Watch: Rupee hits fresh record low as oil prices surge above $105 — TradingView News
The Indian rupee opened at a fresh record low against the dollar on May 12, tracking weakness in Asian currencies after President Donald Trump cast doubt on the Iran ceasefire, prolonging uncertainty around the Strait of Hormuz.
At 9:10 am, the rupee was trading at 95.58 against the $, down 0.28 percent from its previous close of 95.31.
Brent crude prices rose to $105 per barrel after Trump said the ceasefire with Iran was on “life support,” reducing hopes of a near-term deal and pushing oil prices sharply higher. The dollar index also strengthened to 98.10.
Market participants said buying in the $ during the previous session was largely driven by increased gold imports after Prime Minister Narendra Modi urged the nation to curb gold purchases to conserve foreign exchange reserves and reduce the fiscal deficit through work-from-home measures. The Sensex and Nifty both declined more than 1 percent amid concerns over weaker consumption and slowing economic growth.
Experts said the rupee remains vulnerable to elevated crude oil prices and continues to face pressure from rising energy costs.
Exporters who have already sold dollars are expected to wait for further depreciation towards the 96 level, with the Reserve Bank of India currently offering only limited support to the currency. Importers, who earlier received an opportunity to hedge positions, may now wait for a correction in the dollar-rupee pair before increasing hedging activity.
Asian currencies also traded weaker. The South Korean won declined 0.9 percent, the Indonesian rupiah fell 0.56 percent, the Philippines peso weakened 0.5 percent and the Japanese yen slipped 0.25 percent. The Malaysian ringgit declined 0.24 percent, while the Singapore dollar and Thai baht lost 0.19 percent each.
