Rupee Depreciates 22 Paise: Indian rupee lost 22 paise, falling to 85.67 per dollar in early trade on Thursday. This was weighed down by adverse domestic equities and growing geopolitical tensions that have brought in fresh uncertainty to regional risk perception, Forex analysts say.
Forex traders pointed to the terror attack in Pahalgam, Jammu & Kashmir, as a key factor dragging down market sentiment. The attack, which sadly killed 26 civilians, put added pressure on India’s economic prospects, leading to risk aversion among investors.
India retaliated by lowering the level of diplomatic relations with Pakistan and adopting such measures as the suspension of the Indus Water Treaty and shutting down the Attari land-transit post. These actions, though forceful, added tiers of geopolitical tension that further unsettled the rupee.
On the international front, the US dollar index rose from 97.92 to 99.94, led by hope over the relaxation of US-China trade tensions. This rise in the dollar’s value added to the rupee’s weakness.
Prices for Brent crude oil also rose marginally, by 0.09% to USD 66.21 per barrel, which further increases India’s import burden.
Currency experts, such as CR Forex Advisors MD Amit Pabari, said that geopolitical developments tend to initiate rupee weakness. Past trends from events such as the 2016 Uri attack and 2019 Pulwama attack suggest that investor sentiment is driven by India’s strategic reaction after the crisis.
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Technically, the rupee is supported at 85.20 levels and resisted at 85.50 levels. If the resistance is broken, the rupee can further weaken towards 85.80.
Domestic equity markets too followed the downward trend. The 30-share BSE Sensex fell by 281.71 points to 79,834.78 and the Nifty fell by 77.70 points to 24,251.25.
This set of geopolitical tensions, dented equities, and global currency dynamics presents a foggy near-term picture for the rupee, with markets closely observing for stability in both domestic and international forces.
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