Indian Rupee weakens on Friday due to geopolitical tension risks, renewed USD demand.
The fear of a wider conflict between Israel and Iran exerts some selling pressure on the INR.
Investors await the RBI Monetary Policy Committee (MPC) Meeting Minutes, which are due on Friday.
Indian Rupee (INR) trades on a weaker note on Friday amid geopolitical fears and foreign fund outflows. The escalating tension between Israel and Iran heightens concerns of a wider conflict in the Middle East, triggering the fear of oil supply disruption. Higher oil prices hurt the INR, as India is the third-largest consumer and importer of crude oil. Furthermore, the higher demand for the US dollar (USD) on safe-haven appeal might lift the pair.
However, the USD/INR’s potential upside is limited as the Reserve Bank of India (RBI) is likely to intervene in the foreign exchange (FX) market to prevent the volatility of local currency. Investors will monitor the RBI Monetary Policy Committee (MPC) Meeting Minutes on Friday. Also, Chicago Fed Austan Goolsbee is set to speak.
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