Rising oil prices and US-Iran compensation demands drive INR lower as India’s import-dependent economy faces pressure.
The Indian Rupee (INR) opened weaker against the US Dollar (USD) on Tuesday, with the USD/INR pair climbing to near 95.40. The decline follows a 0.45% rise in crude oil prices, as escalating geopolitical tensions disrupt global supply expectations.
Oil prices surged after US President Donald Trump demanded war reparations from Iran, responding to Iran’s own compensation conditions for reopening the Strait of Hormuz. The standoff heightened uncertainty, pushing the MCX Crude Oil contract to Rs. 7,835, close to its weekly high.
India’s heavy reliance on oil imports leaves the INR vulnerable to price spikes. This week, July Consumer Price Index (CPI) data for both India and the US will be a key driver for currency movements.