Rupee Retreats on Rising Oil Prices

2026-06-08 04:14 By Mariene Camarillo 1 min. read

The Indian rupee edged down to around 95.3 per dollar, retreating from last week’s four-week highs as a broad selloff in Asian equities and a spike in global crude prices halted its upward momentum.

Broader Asian currencies similarly weakened as optimism faded surrounding a potential US-Iran peace deal.

This pullback followed a Friday rally driven by aggressive Reserve Bank of India interventions to boost dollar inflows.

While economists project these measures will attract $30–$50 billion by March 2027 and limit immediate downside risks, external pressures have quickly overshadowed these gains.

Sentiment was further strained by rising US Treasury yields, as stronger-than-expected May jobs data fueled expectations of a Federal Reserve interest rate hike later this year.

Meanwhile, investors digested data showing India's real GDP grew 7.8% year-on-year in the March quarter of 2026.

While down slightly from the revised 8% prior, the performance comfortably beat market forecasts of 7.2%.



News Stream
Rupee Retreats on Rising Oil Prices
The Indian rupee edged down to around 95.3 per dollar, retreating from last week’s four-week highs as a broad selloff in Asian equities and a spike in global crude prices halted its upward momentum. Broader Asian currencies similarly weakened as optimism faded surrounding a potential US-Iran peace deal. This pullback followed a Friday rally driven by aggressive Reserve Bank of India interventions to boost dollar inflows. While economists project these measures will attract $30–$50 billion by March 2027 and limit immediate downside risks, external pressures have quickly overshadowed these gains. Sentiment was further strained by rising US Treasury yields, as stronger-than-expected May jobs data fueled expectations of a Federal Reserve interest rate hike later this year. Meanwhile, investors digested data showing India's real GDP grew 7.8% year-on-year in the March quarter of 2026. While down slightly from the revised 8% prior, the performance comfortably beat market forecasts of 7.2%.
2026-06-08
Rupee Strengthens After RBI Holds Rates
The Indian rupee strengthened to around 95.4 per dollar, recovering part of its recent losses as the Reserve Bank of India left its benchmark repurchase rate unchanged at 5.25% and unveiled a series of measures aimed at attracting foreign capital and supporting the currency. The central bank eased investment rules for overseas investors in government bonds and equities to boost dollar inflows and support the rupee. Despite raising its inflation forecast for the fiscal year ending March 2027 to 5.1% from 4.6%, the RBI maintained a neutral policy stance, signaling that it prefers to wait for greater clarity on inflation dynamics before considering further action. The decision underscored the RBI's preference for supporting growth and stabilizing the rupee through capital-flow measures rather than higher interest rates. However, elevated oil prices, Middle East tensions, and inflation risks continued to limit further gains.
2026-06-05
Rupee Extends Losses on Outflows
The Indian rupee edged lower to around 95.7 per dollar, extending losses as sustained foreign capital outflows and broader weakness across Asian markets dampened investor sentiment. Pressure on the currency intensified after foreign investors offloaded nearly $600 million in Indian equities on Wednesday, following approximately $3 billion in net sales over the preceding three sessions. Renewed US-Iran tensions further weighed on risk appetite, while conflicting signals on potential de-escalation kept markets on edge. Some support for the rupee could come from efforts to attract overseas capital, with reports suggesting the government is considering scrapping capital gains tax on foreign portfolio investments in government securities. Investors are also awaiting the Reserve Bank of India's policy decision, where the central bank is widely expected to keep its benchmark interest rate unchanged at 5.25%.
2026-06-04