Rupee Slides 21 Paise to 95.28 Against Dollar as Crude Prices Climb

The Indian rupee fell 21 paise to settle at 95.28 against the US dollar on Wednesday, giving back a chunk of the previous session's modest gain. The currency's slide came as the dollar strengthened broadly and crude oil prices moved higher, two forces that tend to squeeze rupee sentiment at the same time.

Trading in the interbank foreign exchange market began at 95.01. The rupee then drifted weaker, touching an intra-day low of 95.29 before settling near that level. On Tuesday it had ended at 95.07 after a rise of 8 paise, so the latest move reversed that small recovery in one stroke.

Currency analysts see the near-term tilt as mildly negative. Their reasoning rests on two points: a robust dollar, supported by higher US Treasury yields, and an oil bill that keeps rising. India imports most of its crude, so every sustained jump in global prices adds to the demand for dollars from refiners and importers, which weighs on the rupee.

Anindya Banerjee, head of commodity and currency research at Kotak NEO, told market watchers that elevated oil remains a steady source of dollar demand. He also pointed to foreign portfolio flows, the broader global dollar trend and the Reserve Bank of India's market operations as the factors that will decide how fast and in which direction the currency moves.

Banerjee flagged the US Federal Reserve as the common trigger across Indian and global markets. A tougher-than-expected signal on policy in December could strengthen the dollar and lift yields further. That, in turn, could weigh on precious metals and on emerging-market currencies, including the rupee, as investors pull money toward higher-yielding US assets.

For now, the rupee's story is one of external pressures rather than domestic weakness. Readers tracking the currency should watch crude benchmarks, daily flow data and any comments from the central bank, since these will shape whether the rupee steadies near 95 or extends its slide. For a fuller picture of the session, see the original report at The Hans India.

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