Rupee nears record low as oil prices remain elevated
The rupee hovered near record lows as high oil prices pressured the growth outlook. Traders expect central bank intervention to manage ongoing volatility.
The Indian rupee traded in a narrow range on Tuesday as geopolitical tensions and high energy costs continued to weigh on the currency. In India, the rupee was little changed at 92.4250, hovering just above the record low of 92.4750 reached last week. Market participants noted that intermittent dollar sales by state-run banks helped stabilize the currency, indicating that the central bank remains committed to smoothing out excessive volatility. The ongoing conflict involving Iran has kept crude oil prices above the $100 mark, leaving the rupee vulnerable to concerns over the domestic growth-inflation outlook and capital outflows from local equities. The war, which involves the United States and Israel, is now in its third week. The closure of the critical Strait of Hormuz, a vital artery for 20% of the world's oil and liquefied natural gas, has exacerbated energy price spikes and global economic uncertainty.
