Rupee slips 21 paise to 91.29 amid surging crude, strong dollar, and Middle East conflict

The Indian rupee depreciated 21 paise to 91.29 against the US dollar in early trade on Monday, pressured by soaring crude oil prices, a firm American currency, and heightened global volatility following escalating tensions in the Middle East. 

Forex traders said negative domestic equity sentiment and heavy foreign fund outflows further weighed on the Indian currency. 

At the interbank foreign exchange market, the rupee opened at 91.23 and slipped to 91.29 against the greenback in initial deals, down 21 paise from its previous close of 91.08 on Friday. The domestic unit had settled 17 paise lower in the previous session. 

The dollar index, which measures the greenback’s strength against a basket of six major currencies, was trading 0.22 per cent higher at 97.78. 

Brent crude rose 3.91% to $76.78 per barrel 

Global oil benchmark Brent crude surged 3.91% to $76.78 per barrel in futures trade, tracking fresh geopolitical concerns. Analysts said crude prices spiked after the US and Israel launched military strikes against Iran, intensifying fears of a wider regional conflict that could disrupt energy supplies. 

In the latest escalation, US and Israeli forces reportedly struck multiple targets across Iran on Sunday, including ballistic missile sites and naval assets, deepening instability in the region. 

Rising crude prices pose a major risk to India’s macroeconomic stability, as the country meets nearly 85% of its fuel requirements through imports. A sustained rally in oil prices could sharply inflate the import bill, widen the current account deficit and add pressure on the rupee. 

Equity benchmark indices opened sharply lower 

On the domestic equity front, benchmark indices opened sharply lower. The Sensex plunged 691.47 points, or 0.85%, to 80,595.72 in early trade while the Nifty dropped 240.95 points, or 0.96%, to 24,937.70. 

Foreign institutional investors (FIIs) were net sellers on Friday, offloading equities worth ₹7,536.36 crore, according to exchange data, adding to currency pressures. 

Meanwhile, government data released on Friday following a revision of the GDP calculation framework projected India’s economic growth at 7.6% for the current fiscal year. 

Separately, the latest data from the Reserve Bank of India showed the country’s forex reserves declined by $2.119 billion to $723.608 billion for the week ended February 20. In the preceding week, reserves had surged by $8.663 billion to a record high of $725.727 billion.