Rupee under siege

Mumbai: The Indian rupee plunged 82 paise, or nearly 1 per cent, to close at a record low of 93.71 (provisional) against the US dollar on Friday, pressured by persistent foreign fund outflows and a sharp rise in crude oil prices amid escalating geopolitical tensions.

At the interbank foreign exchange, the rupee opened at 92.92 and quickly breached the 93-mark for the first time. It continued to weaken through the session before settling at its all-time low, down from the previous close of 92.89 on Wednesday. Forex markets were shut on Thursday for Gudhi Padwa.

Traders said the currency remains under heavy pressure due to surging crude oil prices and growing risk aversion among investors. Rising energy costs could widen India’s trade deficit and fuel inflation, further weighing on sentiment.

Analysts noted that geopolitical tensions in West Asia and sustained foreign institutional investor (FII) outflows have exacerbated the rupee’s decline. FIIs sold equities worth Rs 7,558.19 crore on a net basis on Thursday, according to exchange data. Meanwhile, global central banks, including the US Federal Reserve, European Central Bank, Bank of England and Bank of Japan, kept interest rates unchanged, citing inflation concerns while signalling readiness for future policy action. The dollar index rose 0.35 per cent to 99.58.

Asian currencies have broadly weakened against the US dollar since the onset of the West Asia crisis, as a surge in crude oil prices and rising geopolitical risks triggered a global risk-off sentiment. Oil-sensitive economies such as Indonesia and South Korea have seen sharper currency declines, with the Indonesian rupiah and South Korean won coming under sustained pressure due to concerns over widening trade deficits and imported inflation.