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The Indian rupee declined by 32 paise to an all-time low of 95.20 against the US dollar on Thursday, April 30, influenced by hawkish signals from certain Federal Reserve officials that strengthened the dollar and U.S. bond yields, further increasing pressure from the continuous rise in oil prices.

The currency is set to experience its third consecutive weekly drop, having erased nearly all gains achieved earlier in the month after the central bank implemented rare measures to reduce excessive speculation.

During the overnight meeting, the Fed decided to maintain policy rates, but this decision was the most contentious since 1992, with three officials expressing dissent over guidance that continued to indicate a preference for easing.

Oil prices rose yet again on Wednesday and continued their upward trend during Thursday's trading session in Asia. Brent crude futures were last reported at almost $121 per barrel, setting the stage for a weekly increase of approximately 14%.

According to experts, India’s heavy reliance on crude imports has become a significant source of economic pressure in recent months. Over the past three months, oil alone has added roughly $12–13 billion to the monthly import bill. Analysts note that this isn’t just a headline figure—it is feeding directly into a widening trade deficit, stoking inflationary concerns, and weighing on the rupee.

Market experts also point out that India’s own economic assessments reflect this trend, with crude prices averaging around $113 in March and close to $115 through April. These elevated levels are already beginning to show up in wholesale price indicators, signalling building cost pressures across the economy.

However, experts emphasize that oil is only part of the story.

They highlight that capital flows have also turned unfavorable for the rupee. Foreign investors have pulled out nearly $20 billion from Indian equities so far this year, exceeding the total outflows seen in 2025. According to market participants, such sustained outflows increase demand for dollars, thereby adding further downward pressure on the rupee.

Global monetary policy has added another layer of complexity. Analysts note that while the Federal Reserve kept interest rates unchanged, its guidance signalled a more cautious stance. With inflation still elevated—partly due to energy prices—experts interpret the indication of just one potential rate cut as a relatively hawkish signal.

They also underline that Jerome Powell, in what may be his final meeting as Chair, reaffirmed the Fed’s independence by pushing back against political pressure. According to experts, this reinforces the expectation that US monetary policy will remain driven by economic data rather than political considerations.

In response, US bond yields have moved higher, and the dollar index has edged toward the 99 mark. While not a sharp surge, experts say it is sufficient to keep emerging market currencies, including the Indian rupee, under sustained pressure.

According to Amit Pabari, MD, Research Team, CR Forex Advisors, right now, the rupee is no longer trading in isolation it is reacting to three dominant forces: oil, capital flows and central bank policies. Technically, 93.50–93.80 remains a strong support zone, and on the upside, 95.00–95.20 will act as a resistance band.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players.

At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors.

Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation.

Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.

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