Rupee falls 43 paise in a single day to close at 95.61 against US dollar

New Delhi: The rupee depreciated 43 paise to settle at 95.61 against the American currency on Monday, pressured by elevated crude oil prices and the strength of the US dollar in the overseas market due to higher risk aversion amid escalating geopolitical tensions.

Forex traders said the USD/INR pair erased most of the previous trading session's gains on risk aversion in global markets.

Follow The PSUWatch Channel on WhatsApp

Further, a sharp jump in crude oil prices and a rise in the US dollar index dented investor sentiment.

At the interbank foreign exchange market, the rupee opened at 95.35, moved between the high of 95.15 and the low of 95.75 against the greenback in intraday trade. The domestic unit finally ended the session at 95.61, registering a loss of 43 paise from its previous close.

On Friday, the rupee appreciated 56 paise to close at 95.18 against the US dollar, after the Reserve Bank announced measures to support foreign capital inflows and strengthen forex liquidity.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 100.16, up 0.09 percent.

Brent crude, the global oil benchmark, was trading higher by 3.94 percent at USD 96.76 per barrel in futures trade after Iran launched multiple rounds of missiles toward Israel.

"We expect the rupee to trade with a negative bias on escalating geopolitical tensions between the US, Israel, and Iran and rising crude oil prices. A strong dollar and rise in US treasury yields may also pressurise the rupee," said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.

Choudhary further noted that any intervention by the Reserve Bank may support the rupee at lower levels... USD-INR spot price is expected to trade in a range of 95.40 to 96.10.

Dilip Parmar, Senior Research Analyst, HDFC Securities, said the rupee erased most of its Friday gains as escalating Middle East tensions fuelled a surge in crude oil prices and safe-haven demand for the greenback.

"Additionally, robust US jobs data has revived expectations that the FOMC may raise interest rates, further dampening risk appetite and boosting the US dollar. In the near term, spot USD-INR is expected to consolidate within a range of 94.50 to 96.50," Parmar said.

On the domestic equity market front, Sensex tanked 719.08 points to settle at 73,524.26, while the Nifty dived 243.70 points to 23,123.

Foreign institutional investors offloaded equities worth Rs 5,555.67 crore on a net basis on Monday, according to exchange data.

India recorded a current account surplus of USD 7.1 billion, or 0.7 percent of GDP, in the January-March quarter of 2025-26, helped by services exports and higher remittances, according to Reserve Bank data released on Monday.

The surplus was USD 13.7 billion or 1.4 percent of GDP in the fourth quarter of 2024-25.

However, for the entire fiscal 2025-26, the current account deficit stood at USD 25.2 billion or 0.6 percent of GDP compared to USD 22.9 billion or 0.6 percent of GDP in 2024-25.

Follow PSU Watch on LinkedIN

Meanwhile, US President Donald Trump has asked Israeli Prime Minister Benjamin Netanyahu not to retaliate to Iran's latest barrage of missiles, saying it would jeopardise the ongoing negotiations for a peace deal to end the three-month-long conflict.

US media outlet Axios reported that after Iran launched missiles at Israel on Sunday, Trump spoke to Netanyahu in a bid to prevent fresh tensions between the two nations from derailing the peace deal.

(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated.)