Rising oil prices near $93 weigh on the INR, halting its three-day gain streak against the USD amid geopolitical tensions.
The USD/INR pair recovered to 94.56 on Friday after falling to a two-week low of 94.03, as the Indian Rupee struggled under pressure from rising oil prices. The rebound follows renewed geopolitical concerns after Iran accused the US of violating a temporary ceasefire, triggering volatility in crude markets.
Oil prices, though down 1.6% at $93, remained elevated after recovering from Thursday’s low of $87.50. India, a major oil importer, faces heightened import costs, which could strain its current account balance. The rupee’s decline contrasts with its three-day winning streak earlier in the week.
Foreign institutional investors continued to reduce holdings in Indian equities, adding to downward pressure on local markets. The US and Iran exchanged conflicting statements on the ceasefire’s status, keeping energy markets on edge.