Indian Rupee Opens Lower as Rising Oil Prices Strengthen US Dollar Demand

The Indian rupee started Wednesday’s trading session on a weaker note, slipping by 11 paise against the US dollar in the interbank foreign exchange market. The domestic currency opened at 96.36 after ending the previous session at 96.25.

Currency analysts attributed the decline to renewed strength in the US dollar and rising global crude oil prices. Increasing geopolitical tensions have encouraged investors to shift toward safer assets, boosting demand for the American currency.

Traders said concerns surrounding shipping routes through the Red Sea and the Strait of Hormuz continue to keep energy markets on edge. Ongoing geopolitical developments in the Middle East have also supported crude oil prices, adding pressure on currencies of oil importing nations such as India.

Despite the latest decline, market experts believe recent measures introduced by the Reserve Bank of India to encourage foreign currency deposits have helped improve investor confidence and provided some support to the rupee.

Dealers are also closely watching the central bank’s market operations through state owned banks to reduce excessive volatility in the foreign exchange market. According to analysts, the RBI appears focused on ensuring orderly currency movements while allowing the exchange rate to adjust gradually.

In the domestic stock market, benchmark indices traded lower during early hours, although foreign institutional investors remained net buyers in the previous trading session, offering some support to overall market sentiment.