Rupee Starts Lower At 95.36 Against U.S. Dollar As Dollar Demand Persists

The Indian rupee opened at ₹95.36 per U.S. dollar on August 13, compared with the previous close of ₹95.33, marking a marginal decline at the start of trade. Persistent dollar demand from hedgers remained a key factor weighing on the domestic currency.

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Oil Prices And Dollar Movement

Finrex said elevated crude oil prices and uncertainty surrounding the Middle East were restricting the scope for a stronger rupee, while India’s external liquidity position continued to provide some support.

The dollar index was trading near 99.93, after moving higher in the previous session. The index tracks the U.S. dollar against a basket of major currencies, including the euro and Japanese yen.

The crude oil price remained close to $88 a barrel, keeping attention on the impact of higher energy costs on the rupee. India imports a large share of its crude oil requirements, making movements in international oil prices an important factor for the currency market.

Finrex said the Reserve Bank of India has been supporting the rupee around the ₹95.41-₹95.45 levels as oil-related dollar demand puts pressure on the currency. It added that exporters could continue selling dollars near ₹95.40 while crude oil remains below $90 a barrel.

Asian Currencies Mostly Gain

The rupee’s opening came as several Asian currencies traded higher against the U.S. dollar.
The South Korean won gained 0.28%, while the Taiwan dollar advanced 0.18%. The Thai baht rose 0.09%, and the Japanese yen and Singapore dollar each strengthened by around 0.06%.

The Indonesian rupiah moved in the opposite direction, declining 0.09%. The Philippine peso also slipped 0.04% against the U.S. dollar.

The mixed performance in the Asian currency was driven by the disparity in currency flows in the region as the investors kept an eye on the performance of the dollar.

Rupee Trading Range Under Focus

The rupee has been under pressure due to the demand for dollars in relation to the payment of oil. At the same time, central bank intervention has helped prevent sharper moves in the domestic currency.

For the currency market, the crude oil price and the dollar index remain important factors to watch, particularly as elevated energy costs can increase India’s demand for dollars. The rupee’s movement during the session will also depend on dollar flows from exporters, importers and other market participants.