Indian Rupee Drops to 95.22 Amid Middle East Tensions

The Indian rupee closed at 95.22 against the US dollar on Monday, marking its third consecutive session of depreciation. The currency fell 29 paise from its opening of 94.92 and reached an intra-day low of 95.26. This decline was driven by elevated crude oil prices and escalating geopolitical tensions in the Middle East and between Russia and Ukraine.

While softness in US treasury yields and the US dollar provided some early cushioning, the currency ultimately settled lower. Market volatility also affected the Sensex and Nifty, which both closed higher after experiencing early losses.

Data from the Reserve Bank of India showed a continuing decline in national forex reserves. Reserves dropped by $5.011 billion to $721.016 billion for the week ending October 16, following a previous weekly decrease of $8.578 billion. Analysts suggest that risk aversion in global markets and selling pressure by foreign institutional investors continue to weigh on the currency.