Rupee's 3-day rally ends on Iran flare-up

Mumbai: The Indian rupee slipped on Tuesday, breaking its three day strengthening streak to close at 95.68, versus its previous close of 95.23. The weakness was a result of weakening sentiment as US missile strikes on Iran stalled hopes of a peace deal between the two nations. Crude oil prices near $100 per barrel also added pressure.

In the previous three days, the rupee had gained 97 paise, or 1% to close 95.23 on Monday.

During the day on Tuesday, the Reserve Bank of India intervened at multiple levels throughout the day, as state run banks were spotted selling dollars, traders said.


The rupee traded in the range of 95.33 and 95.68 on Tuesday, and intervention was spotted at 95.45 and 95.61, traders said.

"The rupee was caught between month-end dollar demand and weak sentiment after the US strikes on Iran overnight. The RBI defended the 99.45 level aggressively through most of the session, but eventually stepped away as persistent dollar demand continued to build through the day," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

Forward premiums moved higher, making hedging more expensive as the one month premium was at 4.36% and one year premium stood 3.39%. Previously, premiums were at 4.12% and 3.32% respectively. Global benchmark Brent crude prices were up $3.04, to $99.18 per barrel on Tuesday.