Rupee falls to 94.86 per USD as modest inflows, oil prices retreat

The Indian rupee moved in a narrow range on Monday, supported by modest dollar inflows and lower oil prices but weighed down by persistent importer hedging demand.

The rupee was at 94.86 per dollar as of 10:30 a.m. IST, marginally higher than its close ‌at 94.91 ⁠in ⁠the previous session.

Oil prices retreated in Asia trading after U.S. President Donald Trump said on Sunday the U.S. would move to help clear ships stuck in the Strait of Hormuz. Brent crude oil futures were last at $108 per barrel, down from its intra-day peak of $112.


Traders also pointed to modest dollar inflows which offered support to the rupee.

"Importers ⁠remain persistent ‌USD buyers and the maturity of NDF positions today should limit any USD/INR declines, at least till mid-day," a ⁠trader at a private bank said.

Asian currencies were hovering mixed with the Chinese yuan ticking up while oil-sensitive Asian currencies like the Philippine peso and Indonesian rupiah dipped.

Shares in Asia were trading higher with investors drawing comfort from signs of patchy progress in settling the Middle East conflict at the start of a week packed with earnings and key economic ‌data.

Iran earlier said the U.S. had responded to its 14-point proposal via Pakistan and it was reviewing the response, though Trump said it was ⁠unlikely to be acceptable.

Analysts reckon that the pressure on the rupee may sustain till energy prices cool off in a meaningful way, which would also help shore up capital inflows.

"While the RBI can keep intervening to smooth volatility, it is unlikely to offset the adverse balance of payments dynamics that have anchored expectations of continued INR weakness," analysts at ANZ said in a note.