Rupee gives up Friday's gains, opens 37 paise weaker against dollar

The Indian rupee opened 37 paise lower against the US dollar on Monday (June 8), tracking a rise in crude oil prices and a sharp selloff across Asian equity markets.

The domestic currency opened at 95.32 per dollar, compared with Friday's (June 5's) closing level of 94.95 per dollar.

The decline comes after the rupee posted its strongest single-day gain in two months on Friday, rising 0.88% to close at 94.95 per dollar. The rally was driven by a series of measures announced by the Reserve Bank of India (RBI) aimed at boosting dollar inflows into the country.

Economists estimate the RBI's steps could attract between $30 billion and $50 billion in capital inflows by March 2027, improving the near-term outlook for the currency.

However, the positive momentum faded at the start of the week as global risk sentiment weakened. Asian equities came under pressure after a selloff in US technology stocks spilled over into regional markets. South Korea's benchmark equity index fell nearly 7%, following a more than 4% decline in the Nasdaq on Friday (June 5).

The rupee also faced pressure from a sharp rise in crude oil prices.

Brent crude climbed 3.5% to $96.36 a barrel after renewed Israeli strikes on Lebanon dampened hopes of a broader regional de-escalation and reduced expectations of progress on a US-Iran agreement.

Higher oil prices typically weigh on the rupee as India imports the majority of its crude oil requirements, increasing demand for dollars.

Market sentiment was further hit by stronger-than-expected US jobs data, which pushed US Treasury yields higher and reinforced expectations that the Federal Reserve could keep monetary policy tighter for longer.

-With Reuters inputs