Rupee slips 16 paise as West Asia tensions flare up; ends at 86.74/$

The Indian rupee fell after a day of advance as the US strikes at nuclear sites in Iran triggered a risk-off sentiment among investors.
The domestic currency depreciated 16 paise to end at 86.74 against the dollar, after closing at 86.59 on Friday, according to Bloomberg. The currency has fallen 1.32 per cent so far this month.
Rupee traded weak as the dollar index appreciated toward the 99 mark, indicating broader currency market imbalances, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. Geopolitical tensions escalated after the US conducted airstrikes on three nuclear-related sites in Iran, raising volatility across global markets, he said.
Iran's Parliament has reportedly approved the closure of the Strait of Hormuz after the US struck three nuclear sites over the weekend. US President Donald Trump declared the three facilities 'totally obliterated,' and warned of greater attacks unless Iran makes peace with Israel.
Crude oil prices pared gains after it rose as much as 5.7 per cent during the session. Brent crude price was up 0.25 per cent at $77.20 per barrel, while WTI crude prices were higher by 0.28 per cent at 74.05, as of 3:30 PM IST.
Despite India's reliance on Iranian oil, it has diversified its sourcing from Russia and the US, reducing its dependence on the Gulf, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "However, higher oil prices could impact the current account, potentially weakening the rupee slightly. "
The Reserve Bank of India (RBI) is likely to intervene to maintain market stability, and its forex reserves have reached $698 billion, nearing the all-time high of $705 billion, providing an ample buffer, Bhansali said.
Meanwhile, after depreciating 1.29 per cent against the dollar this financial year, the rupee is expected to weaken more because of West Asian military conflicts, with the expectation that prices of crude oil will rise. According to a Business Standard poll, the majority of the respondents expect the rupee to depreciate to 87 a dollar by the end of July.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Indian Express

31 minutes ago

• Indian Express

BMC extends tender deadline second time in a month to clear Deonar dumpsite

For the second time this month, the Brihanmumbai Municipal Corporation (BMC) has extended the deadline of its ambitious Rs 2,368 crore tender which was floated for appointing a contractor to remove solid waste that are currently lying untreated at the Deonar dumpsite through the scientific method of bio-remediation within three years. The Deonar dumpsite is one of the sites that have been selected by the state government for constructing housing tenements for the Dharavi Redevelopment Project (DRP)–a venture steered by the Adani group and Maharashtra government's Slum Rehabilitation Authority (SRA). The tender was floated on May 14, and the initial deadline was set up at June 3, which was later revised to June 23. Meanwhile, the new deadline stands at July 1. A total of 21 bidders have shown interest in the project. However, till date BMC officials said that no formal bid was submitted by any of the 21 interested parties that had evinced interest in the project. Civic officials said that the primary reason behind the extension is mainly due to the queries that are being submitted by bidders. 'Just because 21 firms have shown interest doesn't mean that all of them will submit their bids and unless we get an adequate number of bidders to submit their bids the deadline will be extended because we want to have competitive pricing,' the official added. At present, the Deonar dumpsite houses 1.85 crore metric tonnes (MT) of legacy waste which are stacked on piles forming large mounds rising upto a height of 40 metres. In its tender document, the BMC has maintained that a total 271-acre portion of the larger 311-acre dumpsite will be cleared. 'The queries raised by officials were mainly related to logistical challenges. A large number of them shared their concern about how such a large pile of legacy waste could be cleared within a three-year period especially because in Mumbai monsoon is there for four months. So, the contractor will lose 12-months within the total 36-month contract since this process can't be executed during the rainy season. So technically, the appointed contractor will get a 24-month window to complete the work,' a civic official told the Indian Express. The officials said that all the contractors who have submitted queries are Indian firms associated with solid waste management (SWM). Some of these firms are based out of Telangana, Tamil Nadu, Madhya Pradesh and Maharashtra. The BMC's move of floating a tender to clear the dumpsite also came seven months after the state government in October last year earmarked 124-acre of the Deonar dumpsite for constructing housing tenements for the DRP which is being executed by a special purpose vehicle–Navbharat Mega Developers Private Limited (NMDPL)–where the Adani Properties Private Limited (APPL) holds 80% of the stake, while the remaining 20% is with SRA.

Hindustan Times

32 minutes ago

• Hindustan Times

India charting new road with record export, free trade agreements: Piyush Goyal

New Delhi: India is charting a new road to economic prosperity with record export figures and multiple free trade agreements, commerce minister Piyush Goyal said on Monday, highlighting the Vanijya Bhawan's efficient infrastructure, effective support systems and positive work environment that was created three years ago. Union minister of commerce and industry Piyush Goyal addresses the gathering during the 3rd year anniversary celebration of Vanijya Bhawan, in New Delhi on Monday. (ANI Photo) 'Supported by a robust digital ecosystem, processes are being streamlined and made quick and more transparent,' the minister said, emphasizing that the Vanijya Bhawan personifies the spirit of optimism and resilience that helped the government to achieve record exports of $825 billion in 2024-25 against all odds. Vanijya Bhawan houses the commerce and industry ministry. Despite global headwinds and adverse geopolitical situations, India has been able to register record export growth year-after-year, which is as per the Prime Minister Narendra Modi's vision that it is a major growth engine, an official said referring to PM inaugurating the modern administrative building of the commerce ministry on June 23, 2022. 'Exports play a key role in the transition of a country from developing to developed status,' Prime Minister said that day. The Union budget for FY26 acknowledged exports as one of the four growth engines for the Indian economy with agriculture as the first engine followed by micro, small and medium enterprises (MSMEs) and investments. Vanijya Bhawan, which is a symbol of 'new thinking', is now India's centre of major trade negotiations, including the recently concluded bilateral trade deal with the United Kingdom and two major ongoing free trade negotiations with the United States and the European Union, the official mentioned above said. 'In all likelihood, an FTA negotiation with Canada is expected to be resumed soon even as we are engaged with similar bilateral trade deals with Peru, Chile and New Zealand. Our hands are full,' he said. 'Vanijya Bhawan has been envisioned as a modern, efficient, integrated and dedicated hub for India's fast-growing commerce and industry ecosystem,' Goyal said in a series of posts on X. 'In the 3 years since its inauguration by Prime Minister @NarendraModi ji, several milestones have been achieved and new benchmarks set in the way India does business,' Goyal said in the post. This has been made possible by the commitment of our employees. From senior officials to the cleanliness staff, each individual working here is helping script the memorable story of India's trade and commerce, he said. 'I would like to thank each and every member of the Vanijya Bhawan Parivar,' he added. The achievements of the last three years remind us of the power of planning, dedication and execution, the minister said. 'Let us commit once again to engage further with our industry and global partners to realise the goal of Viksit Bharat 2047,' he said. 'Development of state-of-the-art futuristic infrastructure has been another highlight. The focus is squarely on empowering businesses and attracting greater investments. Enhancing stakeholder consultations, reducing compliance burden and improving Ease of Doing Business have resulted in empowerment of small businesses, increased investor confidence and a more competitive trade environment,' the minister said. The Prime Minister on June 22, 2018 laid the foundation stone of the Vanijya Bhawan. The building has been completed in less than the budgeted cost of 226 crore. On the day of its inauguration three years ago, Goyal said that the Vanijya Bhawan would be made completely digital and would become a symbol of India's growing power on the global platform.

Business Standard

32 minutes ago

• Business Standard

Brent crude may cross $110 if Hormuz oil flow halves: Goldman Sachs

Goldman Sachs estimates Brent crude prices could temporarily spike to $110 per barrel (/bbl) if the flow of oil through the key Strait of Hormuz shrinks by 50 per cent for a month and remains down by 10 per cent over the following 11 months. In that case, crude prices will settle to an average of $95 per barrel in the fourth quarter of 2025, the bank said in a note released on Monday. In a more severe scenario where Iranian output remains suppressed, Brent would still peak at $90 but then stabilise at $70–80 per barrel in 2026, as global inventories shrink and spare capacity drops. The latest forecast comes days after Citigroup warned oil could cross $90/bbl if the strait is shut. Brent crude prices have risen 13 per cent since the conflict began on June 13, while WTI has gained around 10 per cent. Brent oil futures rose to a five-month high of $78/bbl on Monday, before falling to $75.4/bbl at the time of writing this report. For India, an estimated 10 per cent increase in crude prices may not have much of an impact on the economy where fundamentals remain robust, but a prolonged effect may cause harm, Madan Sabnavis, chief economist at Bank of Baroda, said. 'But if it is over $100 for a prolonged period of time it would mean virtually a 25 per cent increase over the base case assumption and can have a major impact on these variables,' he pointed out. At the beginning of the year, the assumption was that oil would be around $80, and hence anything more than this will raise a red flag, he stressed. The impact on GDP will be driven primarily by how inflation behaves and affects consumption, Sabnavis said. Closing the strait Citing data from prediction market Polymarket, Goldman Sachs noted that markets now price in a 52 per cent probability of Iran closing the strait in 2025, though it emphasised that liquidity on such platforms remains limited. In an unprecedented step, Iran's Parliament voted on Sunday to allow emergency measures to block the narrow, strategic waterway, state media reported. However, the final decision rests with the country's Supreme National Security Council. 'With 20 million barrels per day of oil and 83–84 metric tonnes per year of liquefied natural gas (LNG), the strait accounts for 27 per cent and 20 per cent of global oil and LNG trade, respectively. It is unlikely that it will be impacted for long. Any short-term impact can lead to a further spike in oil prices,' Kotak Institutional Equities pointed out. Arguing that the recent oil price spike is primarily driven by market worries, it noted that prior to the conflict, oil markets were well-supplied and the planned reversal of voluntary cuts by the OPEC+ bloc was an overhang. Iranian supply According to Goldman Sachs estimates, a six-month-long cut in Iranian oil supply by 1.75 million bpd, followed by a gradual recovery, could drive Brent prices to $90 per barrel before declining into the $60 range by 2026. Despite international sanctions, China remains Iran's largest oil customer, accounting for 80–90 per cent of exports. In 2024 and early 2025, Iran's crude exports averaged between 1.38 million and 1.7 million bpd. In March 2025, exports reportedly surged to 1.71–1.8 million bpd amid fears of tighter American sanctions, according to global energy trackers. Kotak said Iranian oil production has been impacted and currently stands at 3.5 million bpd, while exports are at 1.7 million bpd. It is also not in Iran's interest to close the Gulf at a time when the country has been racing to get its oil out. Bloomberg reported last week that Iran has exported an average of 2.33 million barrels per day since June 13, fearing strikes on key oil infrastructure. Large amounts of crude have been brought to Kharg Island, Iran's key oil export terminal in the northern Persian Gulf.