Rupee Falls 15 Paise to 84.45 Against US Dollar Amid Geopolitical Tensions and Crude Oil Price Decline

The Indian rupee fell 15 paise to close at 84.45 against the US dollar on Tuesday, due to growing uncertainty and a cautious recalibration of risk appetite. The decline was supported by a decline in crude oil prices and sustained foreign fund inflows. Geopolitical tensions between India and Pakistan weighed on investor sentiments, keeping the rupee on edge. The dollar index was trading lower, while Brent crude rose 2.86% to $61.95 per barrel.

The Indian rupee fell 15 paise to close at 84.45 against the US dollar on Tuesday, amidst growing uncertainty and a cautious recalibration of risk appetite. The decline was supported by a decrease in crude oil prices and sustained foreign fund inflows. Geopolitical tensions between India and Pakistan also weighed on investor sentiments, keeping the rupee on edge. The dollar index was trading lower, while Brent crude rose 2.86% to $61.95 per barrel.

On Monday, the Indian rupee opened 5 paise higher against the US dollar at 84.45, amid stronger domestic equity markets. The Sensex opened higher by 313.20 points or 0.39 percent at 80,815.19, and the Nifty was up 96.95 points or 0.40 percent at 24,443.65 [1].

The rupee's fall on Tuesday was partly driven by a decline in crude oil prices. June WTI crude oil (CLM25) dropped -1.07 (-1.72%) and June RBOB gasoline (RBM25) fell -0.0331 (-1.58%). This was due to weaker-than-expected US job openings and consumer confidence reports, which were negative for economic growth and energy demand [2].

Geopolitical tensions between India and Pakistan also played a role in the rupee's decline. Pakistan test-launched a second ballistic missile, the Fatah series surface-to-surface missile with a range of 120 km, amidst mounting tensions with India. The missile test was the second in three days, following Saturday's test of another missile with a range of 450 kilometers [3].

The Pakistani military stated that the missile tests were part of military exercises aimed at ensuring operational readiness and validating technical parameters. The missiles were capable of carrying conventional and nuclear warheads. Moody's warned that the standoff between India and Pakistan could have economic repercussions, potentially hampering Pakistan's economic recovery and India's fiscal consolidation [3].

In contrast, Brent crude rose 2.86% to $61.95 per barrel, supported by a decrease in US crude oil inventories and a rise in US oil production. The dollar index was trading lower, which could have contributed to the rupee's decline.

The Indian rupee's performance is likely to remain volatile in the coming days, influenced by geopolitical developments, crude oil prices, and foreign fund inflows. Investors should closely monitor these factors for any potential shifts in the rupee's value.

References:
[1] https://www.tradingview.com/news/reuters.com,2025-05-05:newsml_PDT79B583:0-indian-rupee-opens-higher-against-the-us-dollar/
[2] https://www.barchart.com/story/news/32110951/weak-us-economic-reports-weigh-on-crude-oil-prices
[3] https://www.presstv.ir/Detail/2025/05/05/747430/Pakistan-Tests-Second-Missile-Amid-India-Standoff