The Indian rupee fell to a new low against the US dollar, reaching 92.94, due to elevated oil prices amidst the West Asia crisis. Foreign institutional investors have sold nearly Rs 74,000 crore in the domestic stock market over the past 12 sessions. Iran has issued warnings of harsher retaliatory strikes in response to potential attacks on its energy facilities by the US and Israel.
Qatar reported fires and significant damage at its liquefied natural gas facilities after Iranian strikes on the South Pars offshore natural gas field shared with Qatar. The rupee touched a fresh low of 92.63 against the US dollar on Wednesday, driven by a strong dollar and continuous foreign fund outflows. Despite positive market sentiment and lower crude prices, the rupee faced increased demand for dollars from importers.
Amid the West Asia conflict, the rupee has depreciated by over 1%, with analysts attributing the unfavorable macro backdrop to the sustained high crude prices. The US is contemplating emergency energy measures, such as releasing more crude from strategic reserves and easing restrictions on Iranian oil, to counter rising prices following global supply disruptions. Treasury Secretary Scott Bessent mentioned pre-planned contingency measures to address potential disruptions in global oil flows, particularly in critical maritime routes.
The White House is under pressure to address escalating oil prices after recent attacks on energy infrastructure and disruptions to shipping routes.
