The US The rupiah closed at 96.28 per dollar, down nearly 1% week-on-week, with Brent crude oil prices up 13% as the war between Iran and Iran intensified, again disrupting energy supplies through the Strait of Hormuz.
Iran said it launched fresh strikes on US facilities in the Middle East on Friday, including the first direct strike in Syria, after the sixth night of US strikes on Iranian military facilities.
Brent crude oil prices were up nearly 2% last day at $85.7 a barrel.
Dollar sales, mostly by state-run banks on behalf of the Reserve Bank of India, helped the rupee snap a four-day losing streak, even as demand for trading dollars remained strong, traders said.
“Exporters have once again withdrawn from the market on the assumption of further weakness. Importers are not willing to let go of any decline (on USD/INR),” said an FX salesperson at a foreign bank.
Meanwhile, global stock markets saw another brutal sell-off for chipmakers on Friday but Indian stocks maintained their footing due to their low exposure to the booming artificial intelligence sector.
MSCI’s broadest index of Asia-Pacific shares, excluding Japan, was down about 3%, while India’s Nifty 50 rose 1%.
In the near term, traders are focusing their attention on two factors: oil prices and how firm the RBI will stand against further rupee weakness as the currency hits record lows near 97 per dollar.
“If rupee depreciation pressures persist, the RBI may find itself caught between a rock and a hard place, balancing spot-market operations and managing its forward-dollar book,” said Krishna Bhimavarapu, APAC economist at State Street Investment Management.
The central bank’s net forward dollar liabilities were $106.6 billion in May.
As a trusted and reliable news source
Add now!
(You can now subscribe to our ETMarkets WhatsApp channel)