USD/INR rises to 95.85 after crude oil jumps 4.3%, pressuring India’s import-dependent economy amid geopolitical risks.
The Indian Rupee (INR) retreated against the US Dollar (USD) in early trade Wednesday, halting a three-day rally. The USD/INR pair climbed to near 95.85 as crude oil prices rebounded 4.3%, driven by escalating Middle East tensions disrupting global energy supplies.
Oil’s sharp recovery follows a three-day decline, with the MCX Crude Oil contract trading at Rs. 7,930. India, which imports 85% of its energy, faces higher foreign exchange outflows as oil prices rise, weakening the INR. Geopolitical risks intensified after US-Saudi strikes targeted Iran-backed groups in Iraq, raising fears of prolonged disruptions in the Strait of Hormuz.
The Iranian Revolutionary Guard Corps (IRGC) also reported halting three oil tankers in the Hormuz, further tightening global oil supply. Markets now await the Federal Reserve’s monetary policy decision later this week for directional cues.