The Indian rupee surrendered its previous session’s gains on Monday, slipping sharply by 43 paise to close at 95.61 against the US dollar as rising crude oil prices and a stronger greenback weighed on investor sentiment.
The domestic currency came under pressure as brent crude oil prices surged over 3% following renewed geopolitical tensions in the Middle East. Concerns over potential disruptions to global energy supplies boosted demand for safe-haven assets, strengthening the US dollar and putting emerging-market currencies under strain.
On Monday, the rupee opened at 95.35 and moved in a range of 95.15 and 95.75 . The decline wiped out significant portion of the gains in the previous session, when the currency had rallied after the Reserve Bank of India unveiled measures aimed at attracting foreign capital and improving liquidity in the foreign exchange market.
Market participants said a combination of higher oil prices, global uncertainty and broad-based dollar strength triggered selling pressure on the rupee. Brent crude prices jumped close to 4%, approaching the $97-per-barrel mark, after escalating conflict in the Middle East heightened fears of supply disruptions.
The dollar index, which measures the US currency’s performance against a basket of major global currencies, also rose, adding to the pressure on the rupee and other emerging-market currencies.
Currency strategists see volatility to remain elevated in the coming days as traders closely track geopolitical developments and movements in crude oil prices. Rising US bond yields and increased demand for safe-haven assets could continue to support the dollar in the near term.
Indian equities also witnessed broad-based selling during the session, while foreign institutional investors remained net sellers, further dampening sentiment in the currency market.
On the macroeconomic front, recent RBI data showed India posted a current account surplus of $7.1 billion, equivalent to 0.7% of GDP, during the January-March quarter of FY26. The surplus was supported by strong services exports and healthy remittance inflows. However, for the full financial year, India’s current account deficit widened to $25.2 billion from $22.9 billion in the previous year.
Going forward, the trajectory of crude oil prices, foreign fund flows and developments in the Middle East are expected to play a key role in determining the rupee’s direction against the US dollar.
