Indian Rupee Weakened Further by Oil Price Surge and Rising Dollar Demand, Outpacing Asian Peers

Indian Rupee Declines Against US Dollar for Second Consecutive Session

The Indian Rupee extended its decline against the US Dollar on April 29, marking its second consecutive session in the red. The domestic currency was pressured by the persistent rise in oil prices and an ongoing demand–supply mismatch in dollar flows, which continued to weigh on the rupee.

The rupee opened lower, 20 paise lower at 94.74 per dollar on Wednesday, compared to its previous close of 94.54. This decline is attributed to the rising cost of oil, which is keeping the Indian basket price higher. According to Finrex, the rupee remains vulnerable to the rising cost of oil, with the Indian basket price approaching its all-time high of 95.22 and closing high of 94.8050.

Exporters may continue to sell at the top, while importers may wait for lower levels to buy, Finrex added. The dollar firmed on Wednesday as investors awaited a closely watched Federal Reserve rate decision, with Chair Jerome Powell's potential last meeting as the Chair adding to the anticipation.

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In Asia, currencies held tight ranges in thinned trade, with markets in Japan closed for a holiday and several major central bank decisions still pending. Against the dollar, the euro last traded at $1.1716, while sterling remained little changed at $1.3523.

Asian currencies largely traded lower against the previous close, reflecting broad-based weakness across the region. However, the Malaysian Ringgit and Singapore Dollar were the only currencies to post gains, rising 0.030% and 0.016%, respectively.