The Indian rupee fell on Monday due to stronger dollar demand, ending its six-day gaining streak. The domestic currency declined 35 paise to 94.68 against the dollar, according to Bloomberg data. The fall occurred despite oil prices trending lower at around the $79 per barrel level.
“The rupee has depreciated today (Monday) mainly due to higher dollar demand. After the recent depreciation, importers, hedgers, and other traders are stepping in at those levels,” said Dilip Parmer, research analyst, HDFC Securities.
Currency traders said that foreign banks were observed purchasing dollars in the market throughout the day.
The rupee was the third worst-performing Asian currency on Monday after Philippine peso and South Korean won. So far in 2026, the domestic unit depreciated 5.37%. Over the past year, it has fallen 9.2%.
Market participants also noted that a strengthening dollar index is posing a risk to the Indian currency. The dollar index, which measures the value of the dollar against a basket of six major foreign currencies, rose to 100.89 on Monday, the highest level since May 16, 2025.
Parmer added that the short-term outlook for the rupee remains favourable. “However, either the central bank or hedgers are expected to step in through dollar purchases near the 94 level, limiting further appreciation.”
“The new FCNR (B) scheme is operational from June 8. The rupee will be in positive territory as the dollars flow in. In addition, the crude oil prices are also coming down, which is positive for India as we are a big importer of oil. We are planning to bring in $3 to $4 billion to the country,” said Sashi Dhar, head of treasury at Bank of Baroda.
Market participants anticipate that the policy measures announced to attract dollar inflows will bring in around $50-80 billion.
