Indian Rupee Hits New Low, Falling 16 Paise to 92.35 Against the US Dollar Amid Persistent Crude Oil Price Volatility

Indian Rupee Falls to Record Low Amid Ongoing Iran War and Elevated Crude Prices

March 13, 2024

The Indian rupee opened 16 paise lower, trading at Rs 92.35 against the US dollar, as investor sentiment remained fragile due to elevated crude prices. The ongoing Iran war has fueled concerns that prices may remain elevated for a longer period.

Traders remained cautious, awaiting potential intervention by the Reserve Bank of India (RBI). The Brent crude price was trading near $101 per barrel, as Iran continues to block the Strait of Hormuz, a vital shipping route for oil and natural gas. The US's decision to allow temporary purchase of Russian oil has had a limited impact on prices.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The RBI has been actively protecting the rupee from a free fall. On March 12, the central bank likely intervened in the market when the rupee fell to a record low. Market participants suggest that in the absence of RBI intervention, the rupee could have reached Rs 93 levels.

The RBI has been selling dollars to maintain control over the rupee, but the demand from foreign portfolio investors (FPIs) and oil companies has been significantly higher. This has led to the rupee remaining vulnerable to fluctuations.