Indian Rupee Hits 6-week Low

The Indian rupee fell to around 95.8 per dollar, remaining near seven-week lows as persistent oil price gains, elevated US Treasury yields and growing expectations of a Federal Reserve rate hike weighed on the currency. Brent crude rose above $107 a barrel, extending its monthly rally to more than 18%, as stalled US-Iran talks, fresh Houthi attacks on Saudi Arabia and disruptions to energy infrastructure heightened concerns over supply shortages. The surge in oil prices fueled inflation worries and pushed the US 10-year Treasury yield to 5% for the first time in nearly three years, while markets see a Fed rate hike on Wednesday as almost certain. Meanwhile, the RBI has repeatedly intervened near 95.80 per dollar, helping limit further losses. Market participants also digested fresh data as India’s inflation rate rose to 4.82% in August from 4.45% in July, its highest since December 2024 and in line with expectations, reflecting renewed energy price pressures and a weaker rupee.

The Indian Rupee touched 95.91 against the USD, the lowest since July 2026. Over the past 4 weeks, US Dollar Indian Rupee gained 0.17%, and in the last 12 months, it increased 8.84%.

The Indian rupee fell to around 95.7 per dollar, extending losses for a fourth consecutive session to two-week lows as surging crude oil prices and higher US Treasury yields weighed on the currency. Brent crude climbed nearly 12% this week, approaching $110 a barrel as intensifying Middle East tensions disrupted shipping through the Strait of Hormuz and Red Sea, raising concerns over India’s external balance, growth and inflation. Meanwhile, US Treasury yields rose after stronger-than-expected producer price data lifted expectations of a Federal Reserve rate hike next week, with markets pricing around a 70% chance of an increase and the 10-year yield nearing 5%. The rupee’s decline comes despite recent RBI support, which had helped it strengthen from around 95.70 to a two-month high of 94.30 last week following stronger-than-expected overseas Indian deposit inflows. Markets are closed on Monday in observance of Ganesh Chaturthi, trading will resume on September 15.