The Indian rupee slipped by 5 paise to close at 90.22 against the US dollar on Tuesday, continuing its weak trend as global and domestic factors weighed on the currency. A stronger US dollar, firm crude oil prices and sustained selling by foreign investors kept the local unit under pressure.
The rupee opened on a cautious note in early trade and failed to recover during the session. Currency dealers said demand for the dollar remained high, while the supply of foreign funds stayed limited. The US dollar index moved higher, reflecting renewed strength in the American currency against major global peers.
Rising crude oil prices added to the rupee’s challenges. As India depends heavily on imported oil, higher prices increase the country’s import bill and push up dollar demand. This trend often weakens the rupee and raises concerns about inflation and the current account balance.
Another key factor impacting the rupee was continued foreign portfolio investor (FPI) outflows. Overseas investors have been trimming their exposure to Indian equities, leading to capital outflows and increased demand for dollars. Traders said this selling pressure has limited any meaningful recovery in the currency.
Market sentiment was also cautious ahead of global economic developments, particularly signals on US monetary policy. Expectations that interest rates in the US may remain elevated have strengthened the dollar and reduced risk appetite for emerging market assets.
However, the rupee’s losses were partly capped by suspected intervention from the Reserve Bank of India, which is believed to be active in smoothing sharp currency movements. Analysts said the central bank’s presence has helped prevent excessive volatility in the foreign exchange market.
Looking ahead, the rupee is expected to remain sensitive to global cues, oil price movements and foreign investment trends. Any improvement in risk sentiment or moderation in crude prices could provide some support to the currency in the near term.
Also Read: Germany drops transit visa for Indians
