Rupee Falls to 2-Month Low on Oil Surge

The Indian rupee fell to around 96.5 per dollar, hovering near record lows as sentiment deteriorated after escalating tensions in the Middle East drove oil prices higher. Investor concerns intensified after Brent crude climbed above $90 per barrel, extending its July rally as the US carried out a ninth consecutive night of strikes on Iran following the collapse of an interim ceasefire. Oil prices have surged more than 20% over the past two weeks, boosting importer demand for dollars and prompting the Reserve Bank of India to intervene in both the onshore and offshore foreign exchange markets to support the currency. The rupee has lost about 1.7% this month, with traders warning that Brent crude above $95 per barrel could push it to fresh record lows. Investors also awaited a decision on the inclusion of Indian government bonds in a global debt index, while overseas investors have net purchased $2.3 billion of Indian stocks and bonds so far in July.

The Indian rupee hovered around 96.3 per dollar, remaining under pressure after reaching an eight-week low, as escalating US-Iran tensions fueled a surge in crude oil prices and weakened sentiment. Brent climbed above $85 per barrel after renewed US strikes on Iran and attacks near the country's main oil export terminal heightened concerns over supply disruptions. Meanwhile, the RBI continued intervening in the spot and non-deliverable forward markets to support the currency, though traders said intervention remained relatively measured. The rupee remained under pressure despite a turnaround in foreign portfolio flows, with overseas investors buying about $1.5 billion in Indian equities and $500 million in debt this month, as persistent importer demand for dollars and capital outflows weighed on the currency. However, a softer-than-expected US inflation report, which reduced expectations of imminent Federal Reserve rate hikes and weakened the dollar, helped limit further losses.

The Indian Rupee touched 95.97 against the USD, the lowest since June 2026. Over the past 4 weeks, US Dollar Indian Rupee gained 1.53%, and in the last 12 months, it increased 11.61%.