Rupee slides past 93 for first time on oil shock

The rupee plummeted below 93 to a dollar on Friday as importers jostled for dollars, breaching a psychologically crucial level.

- Subhana Shaikh

The local currency, which has lost 3% since the outbreak of the West Asia war, may remain weak for the near term, experts said, as escalating conflict keeps crude oil prices elevated.

After trading at around 93.4850 during the day, the rupee slipped to a closing low of 93.7075, marking a loss of over ₹1.07 from Thursday's close of 92.6350. The US-Israel war against Iran, and Iran’s counter-strikes on energy assets in the Gulf, have lifted crude oil prices, amplifying concerns over India’s current account deficit, inflation, and growth outlook.

While the Reserve Bank of India was present in the currency market, intervention appeared measured rather than aggressive.

“The momentum of the USD-INR pair was very strong today. There was likely some intervention, but it appeared muted given that it’s the year-end and it would adversely impact rupee liquidity. There are multiple objectives which a central bank has to manage,” Rajeev Pawar, treasury head at Ujjivan Small Finance Bank, said.