Mumbai

The Indian rupee weakened sharply on Monday, breaching the 95 mark against the US dollar for the first time during intra-day trade, as global and domestic pressures weighed heavily on the currency.

After opening on a positive note, the rupee failed to hold its gains and dropped to a record low of 95.22 against the dollar. The currency had begun the session at 93.62 in the interbank foreign exchange market and briefly strengthened to 93.57, reflecting an early gain compared to its previous close.

The initial optimism followed a move by the Reserve Bank of India to reduce the net open position limit that banks can hold overnight to USD 100 million. However, the upward momentum proved short-lived, with the rupee eventually sliding about 160 paise from its opening level.

Market participants attributed the decline to a combination of factors, including a strong US dollar, rising crude oil prices, and ongoing geopolitical tensions. The demand for safe-haven assets has kept the dollar firm, limiting any recovery in emerging market currencies like the rupee.

The dollar index, which tracks the US currency against a basket of major global currencies, remained above the 100 level, further pressuring the rupee despite marginal fluctuations.

At the same time, global oil prices surged amid concerns over supply disruptions. Brent crude, the international benchmark, climbed to around USD 115.50 per barrel, adding to inflationary concerns for oil-importing countries like India.

The weakness in the currency was mirrored in domestic equity markets. The BSE Sensex dropped sharply by over 1,700 points, while the Nifty 50 declined by more than 500 points during the session.

Foreign institutional investors also remained net sellers, offloading equities worth Rs 4,367 crore in the previous trading session, further dampening market sentiment.

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The rupee had already closed at a record low of 94.85 on Friday, and Monday’s slide underscores the continued volatility in currency markets amid global uncertainties.