Rupee came under pressure in early trade on Wednesday, opening 11 paise lower at 96.36 against the US dollar. The slump came as rising crude oil prices and increased demand for safe-haven assets weighed down the currency.Earlier on Tuesday, rupee had ended at 96.25 against the greenback before slipping at the opening of the interbank foreign exchange market.Market participants attributed the weakness to renewed geopolitical tensions that have kept energy markets on edge. Forex traders said worries over the security of oil shipments through the Red Sea and the Strait of Hormuz continue to underpin crude prices. They added that Houthi threats against shipping, along with continuing US-Iran hostilities, have sustained the geopolitical risk premium in the market.Even as the dollar index edged 0.01% lower to 101.15, it continued to attract demand as investors sought safer assets following the latest escalation in the US-Iran conflict.Oil prices also remained firm, with Brent crude, the global benchmark, rising 1.18 per cent to USD 92.08 a barrel in futures trade.While external factors exerted pressure on the rupee, recent measures by the Reserve Bank of India to attract overseas deposits have helped cushion the domestic currency, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.“RBI’s measures to attract overseas deposits have generated significant foreign currency inflows, boosting market confidence and providing support to the rupee,” Bhansali said.He added that dealers are closely monitoring whether the RBI intervenes through state-owned banks to contain excessive volatility in the currency market.“The central bank appears to be allowing gradual adjustments while preventing disorderly moves,” he said.Meanwhile, Dalal Street was also trading in red with BSE Sensex down 0.52% to 77,070.61 and NSE Nifty50 plunging 0.34% at 24,104.40. Exchange data showed that Foreign Institutional Investors (FIIs) remained net buyers on Tuesday, purchasing equities worth Rs 1,650.16 crore.
