Rupee Weakens as Foreign Inflows Fade

The Indian rupee fell to around 95.0 per dollar, retreating from multi-week highs as fading foreign inflows weighed on the currency. Support from foreign inflows linked to the Jio Platforms IPO and position unwinding is expected to fade following the share allotment, leaving the currency more exposed to persistent foreign portfolio outflows. Energy prices also remain a key risk, as Brent crude recently climbed above USD 117 a barrel to a six-month high amid supply concerns following Houthi attacks on Saudi Arabia, raising India's import costs and potentially prompting further hedging by importers. Meanwhile, the Reserve Bank of India's special foreign-exchange window for state-owned oil refiners and market intervention continue to cushion immediate dollar demand. Investors now await the Federal Reserve's decision on Wednesday for signals on the US rate outlook, which could influence dollar demand and emerging-market capital flows.