The rupee ended down 0.5% at 96.3150 per dollar, its sharpest single-day fall in more than two months after it breached the key psychological barrier of 96 even as dollar sales by state-run banks limited its fall.
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The Indian rupee dropped to
its weakest level in two months as global bond yields surged to
decadal highs and oil prices jumped, deepening pressure on the
South Asian currency that was already hurt by foreign portfolio
outflows on Thursday.
The rupee ended down 0.5% at 96.3150 per dollar, its sharpest single-day fall in more than two months after it breached the key psychological barrier of 96 even as dollar sales by state-run banks limited its fall.
Borrowing costs from the US to France, Britain and Japan hit
their highest in decades on Thursday, squeezing already
pressured government finances, and threatening stocks, credit
and other global assets.
The 10-year US Treasury yield, a yardstick for borrowing costs and asset prices globally, rose to 5.34%, its highest since 2002.
Brent crude oil prices reclaimed the $100-per-barrel mark as
well after China suspended oil products exports, potentially
tightening fuel markets already coping with supply shortages
globally.
The multi-front pressures drove down stocks in Mumbai
by about 1% while the yield on the 10-year benchmark
bond rose to its highest level in over two years.
Supply disruptions, volatile energy prices and global
uncertainty could pose near-term risks to inflation, the rupee
and capital flows, the Indian government said in a report on
Thursday.
Prevailing pressures on the rupee have also kept exporters
reticent about hedging their receivables even as importer
hedging remains robust, exacerbating the demand-supply mismatch
in the foreign exchange market.
FX advisory firm IFA Global recommends that exporters should
hedge cautiously and only to the extent of in-hand orders while
importers are advised to hedge on any dips on the dollar-rupee
pair.
Elsewhere, Asian currencies were down between 0.1% and 0.4%
while the dollar index rose 0.5% to nearly 102. Investors
now await a key US labour market report due on Friday, while
Indian financial markets will be shut for a local holiday.
(Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala,
Nivedita Bhattacharjee and Janane Venkatraman)
Published on October 1, 2026
