Rupee Breaches 94 Mark Against Dollar, Falls for Fourth Straight Day

Mumbai: The Indian rupee on Thursday breached the psychologically significant 94 mark against the dollar as Brent crude surged past $103.50 per barrel, raising concerns over India’s import bill. The domestic currency has weakened by 140 paise against the dollar in a span of four days after the RBI partially rolled back some restrictions on banks’ arbitrage trades in rupee derivatives.

The equity markets too added to the cautious tone, with the Sensex down 0.68 per cent and the Nifty off 0.81 per cent, led by declines in IT and banking stocks. Foreign Institutional Investors continue to remain aggressive sellers, with cumulative outflows in 2026 weighing heavily on market stability and limiting any meaningful recovery.

Globally, currency markets showed mixed trends. The euro softened against the dollar on weaker Eurozone data, while the British pound held steady amid expectations of Bank of England policy tightening.

At the interbank foreign exchange market, the rupee opened at 94.03 and hit an intra-day low of 94.17 against the greenback. It also touched the day's high of 93.98, before ending at 94.11 against the US dollar, logging a loss of 33 paise from the previous closing of 93.78 to a dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.12 per cent higher at 98.53.

Traders said that since the RBI partially rolled back its directives on Monday (taken earlier this month to curb excessive speculation), the rupee has been consistently falling from 92.70 to 94.10 losing Rs 1.40 in a period of just four days. The arbitrage opportunity is only existing for corporates and for banks to the extent of $ 100 million (maximum overnight net open position allowed). Yet the dollar demand has not fallen despite all efforts by RBI to curb the same.

“Some other steps need to be taken by the RBI to manage the rupee fall as so far the measures taken have not been able to arrest the rupee’s slide. While 95.22 should act as a resistance in the current up move, we do expect rupee to remain in an overall range of 92 to 96 broadly and 92.50 to 94.50 narrowly in the current scenario,” said Anil Bhansali, head of treasury at Finrex Trading Advisors.