Mumbai: The Indian rupee on Monday closed at a new low of 95.08 to a dollar tracking the rise in global crude oil prices amid Middle East uncertainty, strong dollar demand globally. Importer hedging and maturing of non-deliverable forward contracts also added pressure on the currency. This marks the first time that the domestic currency has closed past the crucial 95-level mark. On April 30, the domestic unit had touched an intraday low of 95.3425 to a dollar.
At the interbank foreign exchange market, the domestic unit opened at 94.95. It made a high of 95.09 and a low of 94.81 and ended the day at 95.08 down 19 paise compared to Thursday’s close of 94.91 to a dollar.
Says Anil Bhansali, head treasury at Finrex Trading Advisors, “The Rupee continues to be vulnerable to the vagaries of rise in oil prices and has closed above 95 for the first time in its life. Dollar was continuously bought and the RBI did step in to control the depreciation. The range for the dollar-rupee for tomorrow is expected between 94.75 to 95.25.”
According to a Reuters report, the RBI is studying ways to mobilise dollar inflows to bolster its foreign exchange buffers and cushion rising pressure on the rupee from a spike in oil prices driven by the Iran war. Among the steps being considered is reviving a mechanism last used in 2013 to draw in dollar deposits from non-resident Indians and the elimination of withholding tax on overseas government bond investors.
Persistent capital outflows have been a sore spot for the rupee for more than a year. In 2026 alone, overseas investors have net sold about $20 billion of Indian stocks and bonds amid heightened global risk aversion, while net FDI inflows have been muted. The RBI has so far leaned towards weeding out volatility, curbing speculation, extending the onshore forwards book into longer tenors, and absorbing large part of oil importers’ USD demand, rather than outright tightening.
Tanvee Gupta Jain, chief India Economist at UBS Securities in a report titled ‘India Economic Perspectives’ said, “Even though the rupee’s real effective exchange rate has fallen to 10-year lows, we expect the currency to remain under pressure. We now forecast FY27 year-end USD/INR at 96 (revised up from 94 earlier).”
The brokerage has lowered the real GDP growth forecast for India from 6.7 per cent year on year to 6.2 per cent for FY 27 on the external shock and monsoon-related uncertainty. Its estimates suggest India’s current account deficit could widen to 2.5 per cent of GDP in FY27 with the balance of payments (BoP) emerging as a key macro vulnerability.
“The RBI may be planning to bring a scheme in line with the FCNR(B) scheme they had launched in 2013 to mobilize dollars by which they had brought in $ 38 billion for a period of three years. That can bring the dollar rupee down as flows are the most important thing that will be required for the pair to come down,”added Bhansali.
Meanwhile the dollar index fell from almost 99 levels to 98 levels but has been well bid at this level due to rise in oil prices inviting safe haven buying of the dollar. Brent oil prices remained on the boil as they moved above $ 112 before again falling to 109.50 per barrel.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: deccanchronicle.com
