Rupee breached the psychologically crucial 96 to the US Dollar mark in early trades amid the US President Donald Trump ratcheting up his war campaign against Iran, sending crude oil prices soaring.
The last time that the Rupee breached the 96 to the Dollar mark was in May 2026.
The Indian currency opened 34 paise weaker at 95.96 per USD and touched an intraday low of 96.1725 in trades so far. It is currently trading at 96.16, per CCIL data.
Brent crude oil spiked to about $85 a barrel against yesterday’s $79 level amid escalating US-Iran hostilities, with Trump seeking to impose a “fee” equivalent to 20 per cent of the value of goods passing through the Strait of Hormuz.
India imports almost 90 per cent of its crude oil requirement. Any increase in its price can upset the fiscal and Balance of Payments math and stoke inflation.
Radhika Rao, Senior Economist – Executive Director, DBS, Bank, said despite an improved outlook for capital flows—supported by stronger inflows into non-resident deposits, a pickup in offshore borrowing, and foreign investors turning net buyers in domestic equities (July inflows of $2.1 billion into equities and US$700 million into debt)—the rebound in global oil prices has clouded the near-term prospects for rupee appreciation.