Rupee Falls to 4-Week Low

The Indian rupee rose to around 91.5 per dollar, rebounding after sliding to a record low in the previous session, as intervention by the Reserve Bank of India helped stabilize the currency. Traders said the central bank sold dollars through state-run banks ahead of the local market open, pushing the rupee up from an initial opening near 92.1 per dollar. Despite the rebound, underlying pressures remained as elevated global oil prices and a strong US dollar continued to weigh on the currency. Oil prices also remained elevated, with Brent crude holding above $80 per barrel as tensions involving the US, Israel, and Iran fueled concerns over possible disruptions around the Strait of Hormuz, a key corridor for India’s energy imports. Persistently high crude prices could strain the country’s external balance and lift importer demand for dollars. Meanwhile, heightened geopolitical uncertainty has prompted foreign investors to trim exposure to Indian equities this week.

The Indian rupee slipped to around 92 per dollar, marking its lowest level on record, as soaring global oil prices and a strong US dollar weighed on the currency. Brent crude climbed above $85 amid US-Israeli strikes on Iran, raising fears of supply disruptions through the Strait of Hormuz, a key route for India’s oil and LNG imports. Higher crude costs threaten to widen India’s current account deficit and boost importer dollar demand. At the same time, heightened risk aversion pushed investors to withdraw more than $350 million from Indian equities on Monday, while the dollar strengthened further as safe-haven flows intensified. Meanwhile, the RBI stepped into both spot and forward markets to dampen excessive volatility and stabilize the rupee. Looking ahead, India’s efforts to diversify energy supplies, including renewed LNG ties with Canada, may ease structural pressure over time.

The Indian rupee slipped past 91.9 per dollar, marking its lowest level in over a month, as a spike in global oil prices and a firm US dollar weighed on the currency. Rising tensions in the Middle East pushed Brent crude higher, raising fears of supply disruptions through the Strait of Hormuz, which handles roughly half of India’s crude imports. At the same time, the dollar strengthened as investors shifted toward traditional safe-haven assets during the latest bout of geopolitical uncertainty, adding further headwinds for the rupee and other emerging market currencies. The RBI stepped into spot and forward markets to contain volatility, with its short-term forwards book at the lowest since September 2024. The rupee could test 91.5-93 if oil stays elevated, with portfolio outflows and importer dollar demand adding pressure. Flight disruptions and higher shipping costs are also feeding near-term energy import stress.