Indian rupee hits 2-month low, breaches 96 per dollar
What's the story
The Indian rupee has breached the psychologically significant level of 96 against the US dollar, a first since May 2026. The fall comes as US President Donald Trump escalates his military campaign against Iran, sending crude oil prices skyrocketing. The rupee opened at 95.96 per USD, down by 34 paise from its previous close. It hit an intraday low of 96.1725 in early trades today and is currently trading at around 96.16.
Economic implications
Brent crude oil prices surge to nearly $85 per barrel
Brent crude oil prices have surged to nearly $85 per barrel from yesterday's $79, amid rising US-Iran tensions. This spike comes as Trump proposes a "fee" of 20% on goods passing through the Strait of Hormuz.
India, which imports almost 90% of its crude oil needs, could see its fiscal and balance of payments math disrupted by rising prices. The increase could also fuel inflation in the country.
Market outlook
Rupee's near-term outlook affected by rising global oil prices
Radhika Rao, Senior Economist - Executive Director, DBS Bank, said that despite a positive capital flow outlook due to higher non-resident deposit inflows and foreign investors turning net buyers in domestic equities, the rise in global oil prices has affected the rupee's near-term appreciation.
The rupee's fall past the 96 per dollar mark for the first time since late May comes as Indian equities also face pressure with benchmark stock index Nifty 50 down 0.6% today.