Rupee Falls to 3-Week Low

The Indian rupee slipped to around 94 per dollar, extending its losses to a three-week low as renewed strength in global oil prices weighed on sentiment. The currency has already lost nearly 1% this week, reflecting sustained pressure from rising crude, with Brent crude oil climbing back above the $100-per-barrel mark. The Reserve Bank of India has stepped into the market in recent sessions, selling dollars to limit volatility. However, dealers noted that strong dollar demand from oil importers and limited supply have continued to exert downward pressure on the currency, keeping it on a weakening trajectory. Adding to the strain, tensions around the Strait of Hormuz have escalated after talks between the United States and Iran failed to progress. The two sides remain at an impasse under an extended ceasefire, with no timeline yet for renewed negotiations.

The Indian rupee hovered around 93.3 per dollar on Tuesday, edging lower after a brief stabilization as domestic policy adjustments weighed on sentiment. Pressure on the currency followed the Reserve Bank of India’s decision to partially unwind recent foreign-exchange restrictions. The measures, introduced only weeks earlier, had supported the rupee by curbing arbitrage between onshore and offshore markets. Their rollback is now seen as increasing trading flexibility but also reviving volatility in currency flows. At the same time, the rupee’s losses were limited by softer global conditions, as the dollar weakened after Donald Trump announced an open-ended ceasefire extension with Iran, easing immediate geopolitical concerns and calming markets. However, tensions remain elevated as the US continues its blockade of the strategically vital Strait of Hormuz, where shipping disruptions are still ongoing.

The Indian rupee steadied to around 92.6 per dollar, holding recent gains as traders weighed the durability of the Middle East ceasefire and broader global risk sentiment. The currency is expected to open in the 92.70–92.80 range, supported by ongoing Reserve Bank of India measures and easing foreign equity outflows, which have helped stabilize flows. However, upside potential is seen as limited, with participants pointing to volatile crude prices, persistent importer hedging, and uneven capital inflows likely keeping the rupee confined to a narrow trading band. Global sentiment remains fragile after renewed Middle East escalation, with Donald Trump and Iranian officials diverging on the path forward and clouding prospects for talks ahead of a ceasefire deadline. Tensions rose after US forces boarded an Iranian-flagged vessel in the Gulf of Oman, the first enforcement action tied to the Strait of Hormuz blockade.