The rupee erased early gains and plunged to a record intra-day low of 95.22 against the US dollar on Monday, weighed down by rising crude oil prices, persistent geopolitical tensions, and a strong dollar.
The domestic currency had opened on a firm note after the Reserve Bank reduced the net open position limit for banks to USD 100 million. However, it failed to hold on to gains and dropped sharply, falling 160 paise from its opening level.
At the interbank foreign exchange, the rupee opened at 93.62 and strengthened further to 93.57 against the US dollar, gaining 128 paise from its previous close. The momentum, however, was short-lived as it slipped to an all-time intra-day low of 95.22.
On Friday, the rupee had already declined by 89 paise to settle at a record closing low of 94.85 against the greenback.
Forex traders said the USD/INR pair remains under pressure due to a strong dollar index and elevated crude oil prices. Safe-haven demand has kept the dollar index above the 100 mark, limiting any recovery in the rupee.
They added that escalating geopolitical tensions have pushed up oil prices, with Brent crude surging amid fears of supply disruptions.
Meanwhile, the dollar index, which measures the US currency against a basket of six major currencies, was trading 0.15 per cent lower at 100.30.
Brent crude, the global benchmark, was trading 2.60 per cent higher at USD 115.50 per barrel in futures trade.
In the domestic equity market, the Sensex plunged 1,733.78 points to 71,849.44, while the Nifty dropped 528.45 points to 22,291.15.
Foreign institutional investors (FIIs) were net sellers, offloading equities worth Rs 4,367.30 crore on Friday, as per exchange data.