Industry Odisha Bureau, Jul 8: Even though a steep fall in the global crude oil has been reported soon after the US-Iran peace deal was inked last month heralding an end to the West Asia conflict as well as re-opening and resuming of shipments through the globally critical chokepoint Strait of Hormuz, economists have reportedly predicted that such a scenario is not enough to ward off depreciation of the Indian Rupee (INR).
Pertinent to note here that, the Indian Rupee (INR) on July 6 reportedly depreciated 20 paise and closed at 95.38 against the US dollar (USD).
Media reports on July 7 had stated that the “INR opened at 95.25 against the strengthening USD and traded in a range of 95.22–95.48 at the interbank foreign exchange market, and finally settled at 95.38 (provisional), while the INR had appreciated 17 paise to close at 95.18 against the USD on July 3 last week.”
Latest media reports, quoting views and analyses of economists, have reportedly predicted that, “INR would remain stable at 94–96 against the USD despite the gradual fall in global crude oil prices, while it is expected to gradually weaken to around 96.5 against the USD by March 2027.”
Economists have reportedly argued that, “Global crude oil prices were highly volatile, touching levels of $114 per barrel in May this year amid the West Asia conflict’s fragile ceasefire and prior to the US-Iran peace deal inked on June 17. Following the peace deal, the crude oil prices have now fallen to around $72 per barrel. Despite this and also during the crisis period, the INR depreciated more than 3% to hit a record-low of 96.82 against the USD on May 20. The local unit had depreciated by 11% in the previous fiscal year 2025-26 (FY26).”
The economists have also reportedly alleged that, “The policies of Reserve Bank of India (RBI) are absorbing dollar inflows despite its recent measures to woo foreign capital have reduced the risk of a sharper depreciation in the rupee.”
Reportedly, the economists have further stated that, “The RBI is expected to absorb much of the additional dollar inflows into its foreign exchange reserves rather than allow them to boost liquidity in the spot market.”
Basing on the RBI data, it has been reported that, “Since the West Asia conflict broke out, India’s foreign exchange reserves have fallen by $61.6 billion to $666.9 billion as of June 26.”
