Indian rupee hits new low against US dollar
What's the story
The Indian rupee has hit a new low, trading at ₹95.16 against the US dollar. This comes after President Donald Trump rejected Iran's response to a US peace proposal, leading to a spike in crude oil prices. The strengthening of the US dollar and heavy foreign portfolio investor (FPI) outflows have further contributed to the decline of the local currency.
Scenario
Modi urges fuel savings, less foreign travel
The rupee's decline also comes a day after Prime Minister Narendra Modi urged citizens to cut petrol and diesel use, avoid non-essential overseas travel, and defer discretionary gold purchases for a year, warning that rising global commodity prices could strain India's foreign exchange reserves. Speaking at a public gathering in Hyderabad on Sunday, Modi said India must brace for global economic uncertainty by adopting "nationally responsible" lifestyle choices, including greater use of public transport, electric vehicles (EVs), and domestic tourism.
Market performance
Rupee opens at ₹94.97 per dollar
The rupee opened at ₹94.97 against the US dollar before rising slightly to ₹95.16 at the time of writing. On Friday, the rupee had managed to recover some losses and ended with a sharp gain of 71 paise at ₹93.51 against the greenback. The dollar index, which measures the strength of the US currency against six others, was trading at 98.20, up by 0.20%.
Oil market impact
Brent crude surges to $105.5 per barrel
Brent crude, the global oil benchmark, saw a sharp rise of 4.17% to $105.5 per barrel in futures trade. The spike comes as US President Donald Trump reportedly rejected Iran's latest response to Washington's peace proposal, raising fears of prolonged conflict in West Asia and potential energy supply disruptions. India, which imports nearly 85% of its crude oil requirements, is directly impacted by rising oil prices with higher import bills and increased demand for dollars.
Market response
Rupee's decline reflected in domestic equity markets
The rupee's decline is also reflected in the performance of domestic equity markets. The Sensex was trading at 76,517.84, down by 810.35 points or 1.05%, while the Nifty was at 23,950.75, down by 225.40 points or 0.93%. Foreign Institutional Investors (FIIs) offloaded equities worth ₹4,110.60 crore on Friday, further contributing to market volatility amid rising crude prices and geopolitical uncertainty.