Rising oil prices near $93.00 and foreign fund outflows weigh on the Indian Rupee amid escalating US-Iran hostilities.
The Indian Rupee (INR) opened weaker against the US Dollar (USD) Wednesday, with the USD/INR pair climbing to near 95.67. The decline follows a 1.4% rise in WTI oil prices to $93.00, the highest level in over a week, driven by renewed Middle East tensions and geopolitical risks.
Oil prices have recovered since May 29 after US President Donald Trump announced revisions to a ceasefire agreement with Iran. Currencies of oil-importing economies like India often weaken in high oil price environments. Foreign fund outflows from Indian equities further pressured the Rupee.
The US Central Command reported intercepting Iranian missile and drone attacks on regional allies, including Kuwait and Bahrain, while conducting strikes on Iran’s Qeshm Island. These developments heightened fears of a broader conflict, supporting oil prices and the USD.