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Indian rupee opened 10 paise higher against the US dollar on Monday (September 7), even as rising crude oil prices and expectations of a possible US Federal Reserve rate hike pose challenges. The rupee opened at 94.39 per dollar, compared with Friday’s close of 94.49, marking an appreciation of 10 paise. The opening move follows a 1% gain last week, partly due to the Reserve Bank of India’s (RBI) intervention in the foreign exchange market. Traders note that RBI’s market presence has helped limit pressure from higher oil prices and a stronger dollar outlook.
Crude oil prices remain a key risk for the Indian currency. Brent crude rose to around $97 a barrel due to escalating US-Iran tensions, raising concerns over potential supply disruptions. Higher oil prices increase India’s import bill and demand for dollars, putting pressure on the domestic currency. However, RBI’s intervention has absorbed some of this pressure.
Expectations of a US Federal Reserve rate hike at its September 15-16 meeting have also strengthened following stronger-than-expected US jobs data. US nonfarm payrolls increased by 162,000 last month, exceeding economists’ estimates. Stronger employment data reduces urgency for the Fed to cut rates, potentially supporting the US dollar and pressuring emerging-market currencies like the rupee. The immediate balance for the rupee depends on RBI support, elevated oil prices, and evolving US interest rate expectations.
Source: CNBC TV18
