Rupee Falls 2 Paise To Close At Fresh Record Low Of 95.25 Against US Dollar

The rupee fell 2 paise to close at an all-time low of 95.25 (provisional) against the US dollar on Tuesday, as investors are retreating from riskier assets amid renewed clashes in the Gulf and targeting of UAE infrastructure, which have reignited supply chain fears.

Forex traders said Brent oil, hovering near $110 per barrel, is maintaining pressure on oil-importing economies like India. Moreover, factors such as unabated foreign capital outflows amid rising geopolitical uncertainties dented investor sentiments further.

At the interbank foreign exchange market, the rupee opened at 95.30 against the US dollar, then lost ground and touched an all-time low of 95.44 in intra-day trade. The rupee finally settled for the day at a fresh record low of 95.25 (provisional), registering a fall of 2 paise over its previous close.

On Monday, the rupee fell 39 paise to close at an all-time low of 95.23 against the US dollar.

"We expect the rupee to trade with a negative bias on rising global crude oil prices as the Strait of Hormuz continues to remain closed. Dollar demand from importers and ongoing geopolitical tensions between the US and Iran may also pressure the rupee.

"However, RBI intervention may support the rupee at lower levels. USDINR spot price is expected to trade in a range of 95.10 to 95.55," said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.47, up 0.10 per cent.

Brent crude, the global oil benchmark, was trading lower by 1.57 per cent at $112.64 per barrel in futures trade.

On the domestic equity market front, Sensex declined 251.61 points to settle at 77,017.79, while the Nifty fell 86.50 points to 24,032.80.

Foreign Institutional Investors purchased equities worth ₹2,835.62 crore on Monday, according to exchange data.

Prime Minister Narendra Modi on Tuesday strongly condemned the attacks on the United Arab Emirates' port city of Fujairah that resulted in injuries to three Indian nationals.

Modi's sharp denunciation of the attacks came a day after the Indians were injured after drone strikes caused a fire at a major oil industry zone in Fujairah. The UAE had accused Iran of carrying out the strike.

The attack on Fujairah city came as the ceasefire between the US and Iran came under strain in the Strait of Hormuz.