24.06.202604:55:23UTC+00Indian Rupee Slides to One-Week Low

The Indian rupee weakened to around 94.8 per dollar, slipping after a brief period of stabilization as renewed strength in the US dollar and shifting expectations for US monetary policy outweighed the impact of lower crude oil prices. Pressure on the rupee intensified after the dollar index rose to its highest level in more than a year, reflecting mounting expectations that the Federal Reserve may deliver one or two additional interest rate hikes before year-end.

The rupee’s losses were partly offset by a sharp decline in oil prices, with Brent crude dropping below $77 per barrel and falling roughly 16.5% over the month. The retreat in energy prices has been underpinned by indications that tanker traffic through the Strait of Hormuz is gradually normalizing. The currency also found some support from improving capital flows: foreign investment into Indian debt has picked up, while outflows from the equity market have eased relative to earlier months.