Rupee Opens 5 Paise Lower at 94.87 Against U.S. Dollar as Oil Prices Near $100

The rupee opened at 94.87 against the dollar on Wednesday, down 5 paise from the previous close. Oil prices were nearing $100 a barrel.

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Tuesday's session had been tougher for the currency, with the rupee registering its biggest fall in almost a month. The RBI intervened in the forex market during the day, but the rupee still closed lower. 

The central bank has increased its intervention in recent weeks. The rupee had reached a two-month high late last week after recovering with support from the RBI. It has given up some of those gains since then as oil prices have risen. 

A bank currency trader cited in a Reuters report said the RBI may be less inclined to intervene aggressively when the pressure on the rupee is coming from higher oil prices. 

Oil prices put pressure on rupee 

The Middle East conflict has entered its seventh month, with the situation widening through fresh attacks involving Iranian-backed Houthis, U.S. strikes on Iranian oil tankers and new sanctions on Tehran. The developments have raised concerns about global crude supplies. 

Crude is now close to $100 a barrel. Fuel shortages have been reported in some parts of the world, and U.S. diesel prices have hit record highs. 

Higher crude prices could put pressure on India’s trade deficit and inflation. They are also a negative for the rupee, according to market experts cited in the report. 

Foreign outflows add to pressure 

Foreign investors have continued to pull money out of Indian equities. More than ₹12,600 crore was withdrawn during the first few trading sessions of September, keeping foreign equity flows in negative territory. 

The cumulative foreign equity outflow for 2026 has now crossed ₹2.37 lakh crore. That is already higher than the ₹1.66 lakh crore withdrawn during the whole of 2025. 

Higher crude prices, elevated global bond yields and continued foreign outflows are creating additional pressure on the currency, according to market experts cited by Mint. 

For USDINR, the 94.00–94.20 zone remains a key support level, according to Amit Pabari, MD, Research Team, CR Forex Advisors. The pair's move above 94.60–94.80 has strengthened its bullish structure. With FCNR-related support gradually fading and global headwinds persisting, USDINR could move towards 95.50 and eventually 96.