INR hits 3-month low amid rising oil prices, geopolitical tensions
What's the story
The Indian rupee (INR) has hit a three-month low against the US dollar, hitting 86.89 intra-day today.
The decline comes amid concerns that a prolonged Iran-Israel conflict could push oil prices closer to their 52-week highs.
The local currency earlier settled slightly higher at 86.72, likely due to central bank interventions, traders said. It is currently trading at 86.57.
High Brent crude prices at $77 per barrel are adding pressure on the rupee's value in international markets.
Market response
'All emerging market currencies are on a weakening bias'
Ritesh Bhansali, Deputy CEO at Mecklai Financial Services, said all emerging market currencies are on a weakening bias due to the ongoing war.
He added that as long as oil prices remain high, the rupee will continue to be under pressure.
The current rupee levels are the lowest since mid-March, according to LSEG data.
A rise in crude oil prices could hurt India's inflation rate as it is a major importer of this commodity.
Market strategies
RBI's forex street presence has been light-footed
Despite the volatile week, traders say the Reserve Bank of India (RBI)'s forex street presence has been light-footed.
The central bank has been selling dollars from its stockpile in a calibrated manner to stem rupee losses and prevent imported inflation.
"Today (Thursday), RBI was present via state-run banks and offered dollars above the 86.80 levels," a trader from a public sector bank said.