Mumbai

The Indian rupee tumbled to a fresh record low of 95.80 against the US dollar during intra-day trade on Wednesday before recovering marginally to close near its all-time low, as rising crude oil prices and persistent geopolitical tensions in West Asia continued to weigh on investor sentiment.

At the interbank foreign exchange market, the rupee opened at 95.52, up 16 paise from its previous close. However, intense volatility through the session saw the domestic currency touch an all-time low of 95.80 against the greenback before settling at 95.67 (provisional), marginally stronger by one paisa compared with Tuesday’s record closing level.

On Tuesday, the rupee had ended at a historic low of 95.68 against the US currency.

Forex market participants said the rupee remained under pressure despite expectations that the government’s recent move to raise import duties on gold and silver could reduce demand for the US dollar by curbing precious metal imports.

Analysts noted that possible intervention by the Reserve Bank of India and lower bullion imports helped prevent a steeper fall, though the currency continued to face headwinds from elevated crude prices and uncertainty surrounding developments in West Asia.

Traders said the rupee has emerged as one of Asia’s weakest-performing currencies this year, having depreciated more than six per cent so far amid rising oil prices, a stronger dollar and persistent geopolitical concerns.

According to Anindya Banerjee of Kotak Securities, the rupee’s movement will now depend largely on the trajectory of crude oil prices and geopolitical developments rather than on gold import trends alone.

The Centre on Wednesday increased import duties on gold and silver to 15 per cent from 6 per cent in an effort to reduce imports and ease pressure on foreign exchange reserves.

Meanwhile, the US dollar index, which tracks the American currency against a basket of six major peers, was trading 0.22 per cent higher at 98.51.

Anuj Choudhary of Mirae Asset ShareKhan said the rupee is likely to remain under pressure due to high crude prices, inflation concerns and continuing geopolitical tensions involving the US and Iran, although central bank intervention may provide support at lower levels.

Global oil benchmark Brent Crude was trading at around USD 107.30 per barrel after easing slightly during the session, following a three-day rally driven by supply disruption concerns in the Strait of Hormuz.

On the domestic equity front, the benchmark BSE Sensex closed 49.74 points higher at 74,608.98, while the Nifty 50 gained 33.05 points to finish at 23,412.60.

Data from exchanges showed foreign institutional investors sold equities worth Rs 1,959.39 crore on Tuesday.

On the macroeconomic front, official data released by the National Statistical Office showed retail inflation rose to 3.48 per cent in April from 3.40 per cent in March, largely driven by higher prices of gold, silver jewellery and selected food items.

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Food inflation also edged higher to 4.20 per cent in April, compared with 3.87 per cent in the previous month.