(Source: Poll of Polls)
Rupee Slips 31 Paise Against US Dollar Following Operation Sindoor
The early morning decline came after the Indian armed forces began 'Operation Sindoor' and launched missile strikes on nine terror targets situated in Pakistan and Pakistan-Occupied Kashmir (PoK).
The Indian rupee opened weaker on Wednesday, slipping 31 paise to 84.66 against the US dollar, following a significant escalation in military activity across the border.
The early morning decline came after the Indian armed forces began 'Operation Sindoor' and launched missile strikes on nine terror targets situated in Pakistan and Pakistan-Occupied Kashmir (PoK).
These included key strongholds of terror outfits such as Jaish-e-Mohammad in Bahawalpur and Lashkar-e-Taiba in Muridke. The military action was a direct response to the recent Pahalgam attack, which claimed the lives of 26 civilians two weeks ago.
At the interbank foreign exchange market, the rupee began trading at 84.65 before easing further to 84.66 against the greenback, marking a noticeable dip from Tuesday’s close of 84.35. The slide in the currency’s value was attributed to mounting geopolitical concerns following the strikes, as traders weighed the potential for further escalation.
Also Read : Operation Sindoor Triggers Uncertainty, Indices Pare Losses And Start Trading In Green
Market Sentiment Turns Cautious as RBI Watches Closely
Amid the heightened geopolitical risks, forex traders pointed to increased dollar buying by both speculators and importers, driven by uncertainty and a sudden spike in demand for safe-haven assets, reported PTI. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said, “There could be some dollar buying by speculators and panicky importers but we think the Reserve Bank of India (RBI) will be present to stop any major slide of the rupee.”
He further noted the potential for equity market outflows, saying, “We expect there could be some selling by FII in the equity markets though that could be subdued as they would want to wait for further news of escalation to filter down.”
Bhansali added that the rupee’s trajectory would likely hinge on the central bank’s intervention, stating, “Markets today are likely to be nervous and a bit volatile, but as we said earlier, it would depend on RBI to control the market volatility and they will determine where the rupee ends today.”
Meanwhile, global cues showed the dollar index up by 0.30 per cent at 99.53. Brent crude also rose 0.68 per cent to $62.57 per barrel. The foreign institutional investors made net equity purchases worth Rs 3,794.52 crore on Tuesday, as per exchange data.
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