Finance
The rupee fell on Wednesday, reflecting the decline of Asian currencies and rising crude oil prices amid uncertainty surrounding the West Asia crisis, according to dealers.
The local currency finished at 93.80 per dollar, up from the previous closing of 93.50. The Reserve Bank of India (RBI) most likely intervened through dollar sales to reduce undue volatility, according to dealers.
“The Indian rupee continued its three-day slide as crude oil prices held firm following President Trump’s extension of the US–Iran ceasefire. This geopolitical tension, alongside the RBI’s move to ease part of currency restrictions and a general ‘risk-off’ sentiment, has kept the rupee under pressure. Technically, spot rupee has resistance at 94.15 and support at 93.40,” said Dilip Parmar, research analyst, HDFC Securities.
“Rupee was in line with Asian currencies given the selling from foreign investors amid the war,” said a dealer at a state-owned bank. “We will see the rupee slide more amid uncertainties. The RBI was present with PSU banks,” he added.
The rupee has been under pressure this week, with traders anticipating a rebound in oil-related dollar demand during the last four days. Since last Friday, when it was trading at 92.93 per dollar, the rupee has fallen by about one rupee. Despite several efforts adopted by the central bank, the local currency has progressively depreciated after rising to 92.50 per dollar earlier this month.
“SBI was reportedly seen buying dollars on behalf of oil companies, taking the rupee lower. RBI seems to be present at 93.87 to supply these dollars,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP. “There was also a possibility of a petrochemical company buying dollars to fund its Russian oil supply,” he added.
So far this year, the rupee has lost 4.18 percent of its value. However, the local currency has appreciated by 1.08 percent in April thus far.
