Indian rupee breaches 96 mark against US dollar
What's the story
The Indian rupee breached the psychological barrier of ₹96 per US dollar today. It is now hovering near a two-month low of ₹96.05. The fall was mainly due to stubbornly high Brent crude oil prices above $100 per barrel and rising bond yields in the United States. Brent crude prices were trading at $105 per barrel, continuing their upward trend for a second consecutive day amid ongoing US-Iran tensions over the Strait of Hormuz.
Yield impact
US yield jumps to 5.2%
The benchmark 10-year US yield has jumped to 5.2%, nearing a two-decade high.
This spike is largely attributed to rising Brent crude prices, which are stoking fears of higher inflation.
Back home, the Reserve Bank of India (RBI) has been actively intervening in the spot market to prevent a sharp depreciation of the rupee.
However, despite these efforts, it touched ₹96.05 today.
Market response
Amit Pabari on rupee's performance
Amit Pabari, Managing Director at CR Forex Advisors, said the RBI is clearly trying to defend the ₹96 zone.
He also noted that continued swap inflows indicate limited upside with 96.10-20 as a key resistance zone.
This means despite RBI's efforts to stabilize the currency, there are still market pressures keeping it from strengthening significantly against the dollar in this range.