Rupee Declines 12 Paise to Close at 94.93 Against US Dollar Amid Rising Crude Prices

The Indian rupee depreciated for the second consecutive day, falling 12 paise to close at a provisional 94.93 against the US dollar on Friday. Market pressure was primarily driven by rising crude oil prices and sluggish domestic equities, alongside ongoing Saudi-Houthi tensions that continue to threaten the stability of global oil markets.

At the interbank foreign exchange market, the rupee opened at 94.78 against the dollar. During the session, it lost further ground to touch an intra-day low of 94.98 before settling at 94.93, marking a decline of 12 paise over its previous close. On Thursday, the rupee had slumped 43 paise to close at 94.81 against the US dollar.

Forex traders noted that the rupee is likely to maintain a slight negative bias due to global dollar strength and Brent crude prices hovering near $114 per barrel. Renewed tensions between Yemeni Houthis and Saudi Arabia are expected to keep crude prices volatile. Meanwhile, the US dollar index recovered, and 10-year US Treasury yields slipped below the 5 percent mark.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, stated that the rupee may face additional pressure from selling by Foreign Institutional Investors (FIIs). However, he added that the softening of US Treasury yields and potential fresh intervention by the Reserve Bank of India (RBI) could provide support at lower levels. Traders are also monitoring upcoming PMI data from the US and India, with the USD-INR spot price expected to trade in a range of 94.65 to 95.25.

In the global markets, the dollar index—which measures the greenback against a basket of six currencies—was trading higher by 0.12 percent at 101.73. Brent crude, the global oil benchmark, traded higher by 1.01 percent at $114.31 per barrel in futures trade.

On the domestic equity front, market indices saw a downturn. The Sensex declined 125.56 points to settle at 73,123.83, while the Nifty dropped 87.65 points to 22,600. Exchange data showed that FIIs offloaded equities worth ₹3,458.70 crore on a net basis on Thursday.

Amid these broader market movements, forex traders observed that near-term dollar liquidity has improved following the public offering by Jio Platforms. The Jio IPO drew significant institutional demand, receiving bids for 136.32 crore shares against 19.75 crore shares on offer by Friday afternoon, marking an overall subscription of approximately seven times. Qualified Institutional Buyers led the demand, bidding 70.85 crore shares against 4.90 crore reserved.

"Fluctuations in the currency market and rising crude oil prices directly impact input costs and operating margins for businesses across sectors, including the startup ecosystem. While macroeconomic headwinds like geopolitical tensions and FII outflows create short-term volatility, large-scale capital inflows through major public offerings like the Jio IPO help stabilize domestic liquidity. Founders and business leaders must closely monitor these currency movements and input cost pressures while planning their capital allocation and scaling strategies." — Dr. Shishir Gupta, Founder & CEO, StartupLanes