Rupee slides to 95.22 against US dollar as elevated crude oil prices exert pressure

The Indian rupee extended its decline for a third straight session on Monday, closing 29 paise lower at 95.22 against the US dollar as elevated global crude oil prices and sustained demand for dollars from importers pushed the currency down.

Trading at the interbank foreign exchange market opened at 94.92 before the rupee touched an intraday low of 95.26 and ended provisional trading at 95.22. A separate market quote placed the final close at 95.1850. Over the past three sessions, the currency has shed 84 paise, or roughly 0.8 per cent, against the greenback.

The downward momentum stems largely from external headwinds. Global oil benchmark Brent crude traded around $115 per barrel, driven higher by geopolitical tensions in West Asia and Eastern Europe, alongside supply disruption concerns in the Middle East. High crude costs expand the national import bill, prompting domestic oil refiners and importers to step up their dollar purchases.

Strong economic buffers absorb external pressure

Despite short-term currency movements, India's broader macroeconomic fundamentals remain exceptionally strong. The Reserve Bank of India holds a substantial foreign exchange reserves cushion of $721.016 billion, according to central bank data for the week ended 16 October. Although reserves dipped by $5.011 billion in the latest reporting period, the massive buffer gives the central bank ample capability to step in and smooth out volatile swings.

Domestic equities also displayed impressive strength on Monday, absorbing global shocks and providing clear reassurance of investor confidence in the nation's economic trajectory.

Equity markets rebound sharply

The benchmark BSE Sensex surged 482.92 points to finish at 73,606.75, while the broader NSE Nifty 50 rallied 153.20 points to close at 22,753.20. The domestic equity rally helped cushion the rupee against further losses.

While foreign institutional investors recorded net equity sales earlier in October amidst a global shift toward artificial intelligence and semiconductor assets, robust domestic liquidity and selective institutional buying have kept domestic equities firm. Net purchases by foreign investors reached ₹887.65 crore on Friday, exchange data showed.

Market analysts expect the dollar-rupee exchange rate to remain within a manageable range of 94.90 to 95.50 in the near term. While global interest rate policies and international energy prices continue to influence daily trading, central bank intervention capacity and solid domestic economic growth ensure long-term currency stability.