The Indian rupee continued its downward trend on Monday, marking its fourth consecutive session of losses as global risk sentiment deteriorated. The domestic currency closed 8 paise weaker at 90.28 against the US dollar, reflecting sustained demand for the greenback amid heightened geopolitical uncertainty and cautious domestic markets.
Although falling crude oil prices offered some relief, it was not enough to offset the impact of a firm US dollar and subdued investor confidence.
Intraday Movement Highlights Persistent Pressure
In the interbank foreign exchange market, the rupee opened slightly firmer at 90.21 but came under pressure as the session progressed. It touched an intraday low of 90.50 before recovering marginally to settle at 90.28 on a provisional basis.
Since December 30, 2025, when the rupee closed at 89.75, the currency has weakened by 53 paise. Recent sessions have seen consistent pressure, with losses recorded on each trading day heading into the new year.
Geopolitical Developments Drive Dollar Demand
Forex market participants pointed to renewed geopolitical tensions following US military action in Venezuela as a key factor behind the rupee’s weakness. The escalation prompted investors to seek safety in the US dollar, strengthening it against most global currencies.
The dollar index, which measures the greenback against a basket of major currencies, rose by 0.24 percent to trade near 98.39, underscoring the broader safe-haven demand.
Crude Oil Decline Offers Limited Support
A notable counterbalance came from the energy markets, where Brent crude prices declined modestly to around USD 60.53 per barrel. Lower oil prices typically support the rupee by easing India’s import bill, but in the current environment, global risk aversion overshadowed this positive factor.
Market experts noted that continued softness in crude prices could help limit further downside for the currency in the near term.
RBI Reserves and Possible Intervention in Focus
Analysts also highlighted the role of India’s strong foreign exchange reserves, which rose by over USD 3.2 billion to USD 696.61 billion in the latest reporting week. The robust reserve position provides the Reserve Bank of India with ample room to intervene if volatility intensifies.
According to market expectations, any central bank action, combined with softer crude prices, may help stabilise the rupee around current levels.
Equity Markets Add to Cautious Tone
Domestic equity markets mirrored the cautious mood. The Sensex declined over 320 points to close at 85,439.62, while the Nifty slipped below recent highs to end at 26,250.30. Weak equities often add pressure on the currency by dampening foreign inflows, though foreign institutional investors were marginal net buyers in the previous session.
Near-Term Outlook for the Rupee
Looking ahead, currency traders are expected to closely monitor global macroeconomic cues, including US manufacturing data and further geopolitical developments. The USD-INR pair is likely to trade within a broad range of 90.00 to 90.60 in the near term, with volatility driven largely by external factors.
