The rupee weakened for the fourth consecutive trading session to breach the 94 per dollar mark on Thursday, tracking the rise in crude oil prices amid uncertainties around the West Asia crisis, dealers said. The local currency settled at 94.11 per dollar, the lowest since March 30, against the previous close of 93.80 per dollar.
“Driven by high hedging dollar demand and a broader shift towards safe-haven assets, the Indian rupee has weakened past the 94 level against the greenback. Central bank interventions failed to arrest the slide as a simultaneous rally in crude oil and the US dollar exerted additional downward pressure. In the near term, the rupee retains its bullish momentum, with support around 93.80 per dollar and resistance at 94.60 per dollar,” said Dilip Parmar, research analyst, HDFC Securities.
The domestic unit has depreciated by 4.50 per cent in the current calendar year so far; however, it has witnessed 0.74 per cent appreciation in April so far.
Brent crude oil prices rose beyond $104 per barrel as stalled peace talks between the United States and Iran heightened supply concerns.
US President Donald Trump has not set a clear deadline for Iran to submit a peace proposal, even as negotiations remain uncertain. Iran, for its part, appears unwilling to compromise on key demands, limiting the scope for fresh talks.
The situation has effectively reached a stalemate, with the Strait of Hormuz remaining disrupted amid continued tensions and restrictions from both sides.
“Since the removal of the circular by the RBI, the Indian rupee has been consistently falling from 92.70 to 94.20, losing Rs 1.50 over a period of four days. The arbitrage opportunity is only existing for corporates and for banks to the extent of $100 million (maximum overnight position allowed). Oil companies are not there in the market (though SBI was seen buying dollars for oil companies through spot), yet the buying of $ has not died despite all efforts by RBI to curb the same,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.
The dollar index was at 98.75, against the previous day’s 98.30. It measures the strength of the greenback against a basket of six major currencies.