The Indian rupee depreciated by 8 paise to 95.78 against the US dollar in early trade on Wednesday. The decline was triggered by rising global crude oil prices following fresh US military strikes, which have dampened market hopes for an immediate US-Iran peace deal.
The escalating conflict in West Asia has pushed investors back toward the safety of the US dollar, while Brent crude oil remains high at around the $98 per barrel mark.
Key Market Indicators at a Glance
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The Rupee’s Movement: Opened slightly stronger at 95.60 but quickly reversed direction to hit 95.78, following a heavy 44-paise drop the previous day.
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Oil Prices: Brent crude hovered at $98.09 per barrel. While down 1.5% in futures trade, prices remain highly elevated due to concerns over the closure of the strategic Strait of Hormuz.
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Dollar Index: Remained strong, trading at 99.09 (down a marginal 0.07%).
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Domestic Equities: The Sensex rose 127.83 points to 76,137.53, while the Nifty gained 36.45 points to reach 23,950.15.
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Foreign Fund Outflow: Foreign Institutional Investors (FIIs) sold off equities worth ₹2,407.87 crore on Tuesday.
All Eyes on the Upcoming RBI Meeting
With the rupee facing continuous pressure, market attention is shifting to the Reserve Bank of India’s (RBI) Monetary Policy Committee meeting scheduled for June 3–5.
Expert Insight: “Markets remain divided between a possible rate hike and a status quo decision,” says Amit Pabari, Managing Director at CR Forex Advisors. Experts suggest the RBI might use interest rates as a tool to protect currency stability and attract foreign inflows, rather than focusing solely on inflation.
