The Indian rupee weakened for the second consecutive session, closing at 95.76 against the US dollar, a decline of 40 paise from the previous day. This depreciation is attributed to proposed US tariffs, escalating oil prices, and geopolitical tensions.
Tariff Concerns
The Office of the United States Trade Representative (USTR) has proposed an additional 12.5% duty on imports from 54 countries, including India. This move is part of the Section 301 investigations initiated in March, targeting forced labor and excess industrial capacity.
"The rupee fell for a second consecutive session, weighed down by capital outflows and mounting concerns over US President Donald Trump's latest tariff proposals," said Dilip Parmar, Research Analyst at HDFC Securities.
Impact of Rising Oil Prices
The geopolitical tensions in the Middle East have pushed Brent crude prices up by 2.76% to USD 98.65 per barrel. This surge in oil prices has further pressured the rupee and affected investor sentiment.
Market Reactions
- The Sensex dropped 303.67 points to 74,346.17.
- The Nifty declined 77.95 points to 23,405.60.
- Foreign Institutional Investors (FIIs) sold equities worth Rs 5,616.56 crore.
Upcoming RBI Policy Decision
Market participants are now focused on the upcoming Reserve Bank of India's Monetary Policy Committee (MPC) meeting, scheduled from June 3 to June 5. The decision, to be announced by RBI Governor Sanjay Malhotra, will provide insights into interest rates, inflation, and the rupee's outlook.
| Date | Event | Impact on Rupee |
|---|---|---|
| June 3-5 | RBI MPC Meeting | Awaited |
| March 11-12 | USTR Section 301 Investigations Initiated | Negative |
The dollar index, which measures the greenback's strength against a basket of six currencies, rose 0.13% to 99.34.
