Daijiworld Media Network - Mumbai

Mumbai, Apr 29: The Indian rupee declined by 13 paise to close at 94.81 against the United States dollar on Tuesday, weighed down by a stronger greenback in global markets, rising crude oil prices, and persistent foreign fund outflows.

According to forex traders, the domestic currency opened on a weak note and continued to trade under pressure throughout the session, reflecting cautious sentiment in financial markets. The strengthening of the US dollar, driven by expectations around interest rate trends and economic resilience in the United States, further impacted emerging market currencies, including the rupee.

Higher crude oil prices also contributed to the decline, as India is heavily dependent on imports to meet its energy needs. An increase in oil prices tends to widen the trade deficit and raises demand for dollars, thereby weakening the rupee.

Market participants noted that geopolitical tensions, particularly in West Asia, have added to volatility in currency markets, prompting investors to shift towards safer assets like the dollar.

Despite the downward pressure, the fall in the rupee was somewhat limited due to suspected intervention by the Reserve Bank of India (RBI) and relatively stable domestic economic fundamentals.

Meanwhile, Indian equity markets showed mixed trends, with foreign institutional investors continuing to remain cautious, contributing to outflows that further weighed on the currency.

Analysts said that going forward, the rupee’s movement will depend on global cues, including US economic data, inflation trends, and signals from the Federal Reserve regarding interest rates. Developments in crude oil prices and geopolitical situations will also remain key factors influencing the currency’s trajectory.