Indian rupee falls 139 paise to 94.90 amid renewed US-Iran tensions
Crude oil prices surge above $105, raising concerns over India’s economy
Reserve Bank of India likely intervenes to limit rupee depreciation
Rupee Slides to 94.90 as Trump Rejects Iran Proposal, Oil Prices Surge
Iran reportedly proposed to have some of its highly enriched uranium diluted, transferring rest to a third country
Summary
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The rupee has slid 139 paise to 94.90 against the US dollar on Monday in the early trade after President Donald Trump rejected Iran's response to the US's peace proposal. At the same time crude oil prices also rallied.
Reuters reported that the Reserve Bank of India likely intervened in the foreign exchange market to limit the rupee's fall as a renewed surge in oil prices raised concerns about risks to India's economic outlook.
The rupee opened at 94.97 against the greenback but inched up to 94.90. It was down 0.4% on the day and tracking losses in regional peers.
On Friday, the rupee pared its losses and ended with a sharp gain of 71 paise at 93.51 against the greenback.
Crude Surges
Meanwhile, Brent crude futures jumped as much as 4.2% to $105.54 a barrel, while West Texas Intermediate climbed above $99 per barrel.
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Here in India, crude oil prices also felt the jolt, and MCX crude registered a similar upward movement of 5.51%, reaching ₹9,471 per barrel.
US vs Iran Continues
Trump refused to accept Iran's proposal to end the over two-month-long war in West Asia and called the terms laid by Tehran completely "unacceptable".
"I have just read the response from Iran's so-called 'Representatives.' I don't like it -- TOTALLY UNACCEPTABLE!" the 79-year-old Republican President wrote on social media without giving further details.
According to the Wall Street Journal, Iran in its response, delivered by Pakistan, proposed to have some of its highly enriched uranium diluted, transferring rest to a third country. It further sought guarantees that the transferred uranium will be returned if negotiations fail or Washington quits the agreement later, the report said.
Modi Calls for Restraint
Prime Minister Narendra Modi on Sunday called on citizens and businesses to conserve fuel and revive work-from-home to curb fuel use amid rising energy prices.
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He called it an effort to save foreign exchange by cutting petrol and diesel usage.
He also urged families to avoid gold purchases for non-essential purposes, including lavish wedding-related buying.