Indian Rupee Declines Against Dollar Amid Rising Brent Crude Prices

Rupee Falls Against the Dollar Amid Ongoing Supply Concerns

The Indian rupee opened 18 paise lower on April 28, trading at 94.37 against the dollar, after Brent crude jumped about 2 percent overnight. The benchmark Brent crude price remained near $110 a barrel due to the continued blockade of the Strait of Hormuz, a key energy route.

The Reserve Bank of India (RBI) is likely intervening in the market to stem a potential free-fall, although the central bank is unlikely to be as aggressive as it used to be. Instead, the RBI is expected to take a more neutral stance by entering the market intermittently. Importers are also looking to hedge their positions to take advantage of the current levels in case the rupee starts depreciating sharply.

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Amit Pabari, managing director at CR Forex Advisors, notes that the rupee continues to trade cautiously, conserving energy before its next decisive move. The Rs 93.50 – Rs 93.80 zone is expected to remain a strong demand base, where dips can be absorbed, while Rs 94.50 – Rs 94.80 acts as a resistance zone.

The ongoing blockade of the Strait of Hormuz has raised concerns about global supply, as peace efforts between the United States and Iran remain stalled. Iran has proposed setting aside discussion of its nuclear programme until the war ends and disputes over shipping from the Gulf are resolved. The United States, however, is reportedly unhappy with the latest peace plan, as it failed to address its nuclear weapon programme.