Rupee Plunges 139 Paise to 94.90 Against US Dollar

The rupee opened at 94.97 against the US dollar before inching up to 94.90, down 139 paise from its previous close, after President Donald Trump rejected Iran's response to the US peace proposal. The rejection led to a surge in crude oil prices, with Brent crude rising 4.17% to $105.5 per barrel in futures trade, and a strengthening of the US dollar, with the dollar index trading at 98.20, up 0.20%.

The surge in crude oil prices and the strengthening of the US dollar, combined with steep FPI outflows, pressured the local unit, according to forex traders. Foreign Institutional Investors offloaded equities worth ₹4,110.60 crore on Friday, and India's forex reserves dropped by $7.794 billion to $690.693 billion during the week ended May 1.

The domestic equity market also felt the impact, with the Sensex plummeting 810.35 points, or 1.05%, to 76,517.84, and the Nifty tanking 225.40 points, or 0.93%, to 23,950.75.

The immediate outlook is that the foreign exchange market will continue to be volatile, with the rupee's movement closely tied to the developments in the US-Iran conflict and the global oil market. The Reserve Bank of India is likely to take steps to stabilize the rupee, and the government may also respond to the situation in the coming days.