MUMBAI — The Indian rupee weakened against the US dollar in early trading on Monday, July 20, falling 12 paise to 96.42 per dollar as higher crude oil prices, demand for the US currency and geopolitical concerns weighed on the domestic currency, according to market participants.
The rupee opened at 96.53 per dollar at the interbank foreign exchange market, compared with its previous close of 96.30, before recovering some ground to trade at 96.42, down 12 paise from the earlier session, foreign exchange sources said.
Market participants said rising oil prices were a key factor influencing sentiment toward the rupee. India, one of the world’s largest crude oil importers, remains sensitive to changes in global energy prices because higher import costs can increase demand for foreign currency.
The currency’s movement came as global markets monitored tensions in West Asia, which contributed to volatility in oil markets and supported demand for safe-haven assets such as the US dollar, traders said.
Reuters reported that the rupee later touched a two-month low of 96.5250 per dollar before closing at 96.4450, down nearly 0.2%, as oil prices remained elevated amid regional tensions. The report said the Reserve Bank of India intervened through state-run banks by selling dollars to limit a sharper decline in the currency.
Foreign exchange traders also pointed to foreign portfolio outflows from domestic equity markets as another factor putting pressure on the rupee. The movement followed a period of weakness for the currency, with traders watching the approach toward previous record-low levels and assessing the impact of global risk factors.
The US dollar remained supported in international markets, while investors continued to track expectations around monetary policy decisions in major economies, including the United States and India.
The Reserve Bank of India has not issued a separate statement on the day’s currency movement. Traders said market attention would remain focused on crude oil prices, global geopolitical developments and potential central bank action in the coming sessions.
