Rupee Eases Amid Higher Crude Prices

2026-05-26 04:07 By Mariene Camarillo 1 min. read

The Indian rupee hovered near 95.4 per dollar, easing slightly after reaching its strongest level in nearly two weeks, as renewed geopolitical tensions and stronger importer demand for dollars pressured the currency.

Fresh US military strikes in southern Iran weakened hopes for a near-term Middle East peace deal, while Brent crude prices rebounded more than 2% to above $98 per barrel after a recent decline.

The rupee had earlier recovered from record lows of 96.96, supported by improved sentiment and dollar-selling intervention by the Reserve Bank of India.

Still, traders expect the rebound to face headwinds from month-end importer demand and maturing offshore non-deliverable forward positions.

Meanwhile, concerns over imported inflation intensified after India raised compressed natural gas prices following another fuel price hike this month.

Goldman Sachs also raised its inflation forecast and now expects two more RBI rate hikes this year.



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Rupee Eases Amid Higher Crude Prices
The Indian rupee hovered near 95.4 per dollar, easing slightly after reaching its strongest level in nearly two weeks, as renewed geopolitical tensions and stronger importer demand for dollars pressured the currency. Fresh US military strikes in southern Iran weakened hopes for a near-term Middle East peace deal, while Brent crude prices rebounded more than 2% to above $98 per barrel after a recent decline. The rupee had earlier recovered from record lows of 96.96, supported by improved sentiment and dollar-selling intervention by the Reserve Bank of India. Still, traders expect the rebound to face headwinds from month-end importer demand and maturing offshore non-deliverable forward positions. Meanwhile, concerns over imported inflation intensified after India raised compressed natural gas prices following another fuel price hike this month. Goldman Sachs also raised its inflation forecast and now expects two more RBI rate hikes this year.
2026-05-26
Indian Rupee Rises to 2-Week High
The Indian rupee strengthened to around 95.4 per dollar, extending its rally for another session to a two-week high as sentiment improved on easing crude oil prices and supportive remarks from the Reserve Bank of India. Support for the rupee increased after Brent crude prices fell below $100 per barrel for the first time in over two weeks amid optimism that the US and Iran are moving closer to a peace agreement. Sentiment was further boosted after Sanjay Malhotra stated that the RBI would do “whatever is required” to ensure orderly forex market movements, adding that the rupee appears undervalued. He also said the central bank has around $700 billion in reserves to curb volatility. However, gains in the rupee were partly limited by persistent inflation concerns after India’s state-owned fuel retailers raised petrol and diesel prices for the fourth time in May to offset losses stemming from higher costs linked to the Iran conflict.
2026-05-25
Indian Rupee Rebounds from Record Low
The Indian rupee strengthened to 95.9 per dollar from the record-low of 97.15 on May 19th after the Reserve Bank of India continued to intervene on currency markets and support the currency from it's slide this year. The central bank sold dollars to state banks through the third week of the month. This outweighed the outflows of foreign exchange, initially stemming from energy importers following the surge in oil prices due to the war in the Middle East, then magnified by selling from Indian equity and bond investors that wanted to reduce rupee positions. Besides selling dollars, officials from the RBI reportedly considered hiking interest rates, as soon as next meeting, to prevent further deprecation and risks to the foreign currency reserves. However, a group of policymakers also advocated against raising rates, opting instead for more currency interventions and policy to stimulate dollar inflows.
2026-05-22