Rupee Falls to 95.98 Against Dollar as Oil Prices Rise

The Indian rupee weakened to 95.9825 against the US dollar on September 28, marking its lowest level in more than a week as rising crude oil prices and global market concerns put pressure on the currency. The rupee ended the session about 0.2% lower.

The decline came as Brent crude climbed nearly 4% to around $108.20 a barrel. Higher oil prices are a major concern for India because the country imports nearly 90% of its crude oil requirements. A sustained rise in energy costs can increase the country’s import bill and demand for US dollars.

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The Reserve Bank of India (RBI) is also closely monitoring the currency. State-run banks sold dollars during the session, with the moves widely viewed as intervention on behalf of the central bank. This helped prevent the rupee from falling significantly beyond the 96-per-dollar level.

Global geopolitical uncertainty also affected investor sentiment. Rising oil prices pushed bond yields higher, while Asian currencies and stock markets came under pressure. India’s benchmark stock indexes also declined sharply during Monday’s trading session.

The weaker rupee could increase costs for Indian businesses and consumers when imported goods become more expensive. Higher crude prices could also add pressure to fuel and transportation costs if the oil shock persists.

Markets will continue watching crude prices, US interest rates, foreign investment flows and RBI intervention for signs of where the rupee could move next.

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