The Rupee opened about 14 paise weaker on Wednesday in the wake of India conducting “Operation Sindoor” to destroy terror infrastructure in Pakistan and fall in domestic equity markets.
The Indian unit opened at 84.58 per US Dollar against previous close of 84.44. The USDINR pair tested a high/ low of 84.61/84.53 in intraday trades so far. It is currently trading at 84.5075 per USD.
The RBI is believed to be ensuring that the Rupee stays competitive vis-a-vis the Chinese Yuan, which is showing a depreciating trend.
Amit Pabari, MD, CR Forex Advisors, observed that the decisive move by India to carry out precision strikes on nine terrorist sites across Pakistan under Operation Sindoor introduces a complex dynamic for markets.
“Foreign investors often view these escalations with caution, and the resulting geopolitical risk could prompt capital outflows and heightened volatility for the rupee in the near term,” he said.
However, Pabari noted that the India-UK Free Trade Agreement positions India as a strategic and stable trade partner, improving global investor sentiment and supporting the Rupee.