Rising crude oil prices and supply disruption fears weigh on the Indian Rupee, pushing USD/INR to multi-week highs.
The Indian Rupee (INR) weakened against the US Dollar (USD) in early trading Wednesday, with the USD/INR pair climbing to near 96.53. The decline follows a fresh rally in oil prices, driven by escalating concerns over global energy supply disruptions.
Crude oil futures on the MCX surged to a five-week high of Rs. 8,253, as Yemen’s Houthi rebels closed the Bab el-Mandeb Strait, a critical chokepoint for oil exports. The move could reduce global oil supply by 7%, exacerbating existing tightness from the Strait of Hormuz closure.
India, a major oil importer, sees its currency under pressure in high oil price environments. The latest geopolitical tensions add to supply risks, with markets monitoring further developments.