Rupee slips 30 paise as oil prices surge, Middle East tensions mount

The rupee opened at 95.84 against the US dollar at the interbank foreign exchange market, marking a 30 paise depreciation from its previous close of 95.54 on Friday. Trading in forex and equity markets had been suspended Monday for Ganesh Chaturthi, leaving a two-day gap before Tuesday's session.

Brent crude oil's climb past USD 106 per barrel has emerged as a key pressure point for the rupee. As India remains heavily reliant on petroleum imports, the surge in global crude prices has triggered increased dollar demand from domestic oil importers, which in turn has strained the currency and raised concerns about the country's external account and inflation trajectory, according to forex market participants.

Geopolitical tensions in the Middle East have amplified the upward pressure on crude prices and bolstered safe-haven demand for the US dollar. The escalating situation has simultaneously pushed US Treasury yields higher, creating a dual headwind for emerging market currencies like the rupee. Treasury and treasury advisory experts attribute the weakness in Asian currencies to a combination of elevated crude valuations and the flight to dollar assets amid regional uncertainty.