Rupee hits record low as oil surge fuels inflation fears
Rupee hits record low as oil surge fuels inflation fears
The rupee slides past 96 per dollar as oil prices surge, widening India's trade gap and raising expectations of policy action.
The Indian rupee slid to an all-time low of 96.1350 per US dollar intraday on Friday, as oil prices hovered near $110 a barrel and intensified pressures on the world’s third-biggest crude importer. It later ended the session at 95.9650, down 1.5% for the week and marking a more than 6% decline year-to-date. The environment remains tense as Brent crude futures rose above $109, fueling concerns about inflation and energy costs for Indian households and businesses.
Analysts warn that the country’s currency weakness could push policy makers toward tighter actions to stabilise exchange rates. Khoon Goh, head of Asia Research at ANZ, said, “The longer the conflict drags on, the more inflationary pressure we’ll see, weaker growth, and a deterioration in external balances. Central banks in the region might be forced to tighten policy to stabilise exchange rates.”
Data released on Friday showed India’s merchandise trade deficit widening to about $28.38 billion in April as Middle East conflict and energy imports weighed on shipments. India imports more than 80% of its crude oil needs and about 60% of its cooking gas, underscoring how global oil price shifts directly hit the country’s bills and overall balance of payments. With energy prices volatile, investors will be watching for any policy signals or currency intervention from authorities as the rupee remains under pressure.
