Rupee Slips to 95.52 as Crude Surge Pressures

The rupee opened at 95.52 against the dollar Thursday, down 4 paise from Wednesday's close of 95.48. The decline followed a jump in crude oil prices after President Donald Trump said he was ending the ceasefire with Iran, a move that threatened shipping through the Strait of Hormuz.

Brent crude traded 1% higher at $78.80 a barrel. Analysts tied the rise to the risk of a Strait closure, which would restrict tanker movements. India imports more than 80% of its crude, making the rupee one of the most vulnerable currencies to oil price spikes.

The dollar index edged lower to 100.98, down 0.09%, offering some offset. On the equity side, Sensex rose 454.78 points, or 0.59%, to 76,958.38. Nifty climbed 151.10 points, or 0.63%, to 24,033.15. Both indices had fallen more than 2% in the prior session.

Foreign institutional investors were net buyers of Indian equities worth Rs 1,962.80 crore on Wednesday, exchange data showed. That buying helped absorb some of the selling pressure on the rupee from the crude move, traders said.

The previous session saw the rupee tumble 52 paise to 95.48, its worst single-day loss in weeks. The fresh dip Thursday extends a stretch of weakness driven by the oil price channel. For a broader look at how crude shocks hit Indian markets, see our earlier analysis of the Brent move and its rupee implications.