Rupee Ends At Record Low Amid Crude Oil Concerns

The rupee depreciated 13 paise to settle at an all-time closing low of 96.83 against the U.S. dollar on Wednesday, according to interbank foreign exchange market data. The domestic currency had closed at 96.70 in the previous session.

During the day, the rupee opened at 96.89 and touched an intraday low of 96.95 before recovering marginally. The currency also recorded an intraday high of 96.65 before ending lower for the ninth consecutive trading session.

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The latest decline comes as global crude oil prices remain elevated due to ongoing tensions in West Asia, increasing concerns around imported inflation and India’s trade balance.

Rising U.S. Yields Add Pressure

Market participants tracked a sharp rise in U.S. Treasury yields, which strengthened the dollar globally and reduced expectations of near-term rate cuts by the U.S. Federal Reserve.

Based on market data, the U.S. 30-year Treasury yield climbed to a two-decade high, while the 10-year Treasury yield rose to its highest level in nearly 16 months.

The dollar index, which measures the U.S. currency against a basket of six major currencies, traded 0.09% higher at 99.42.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee weakened due to a stronger dollar, rising Treasury yields and risk aversion in global markets triggered by inflation concerns.

He added that the USD/INR spot rate is expected to move within a range of ₹96.50 to ₹97.10 in the near term.

Crude Prices Remain Elevated

Brent crude futures traded at $109.95 per barrel, down 2.77% during the session, though prices remained elevated compared to earlier levels this year.

India imports nearly 90% of its crude oil requirements, making the domestic economy vulnerable to higher energy prices and supply disruptions. Rising oil prices increase the country’s import bill and can widen the current account deficit.

The pressure on crude markets intensified after geopolitical developments linked to the Iran conflict and renewed uncertainty around U.S. military intervention in the region.

According to reports, the U.S. Senate advanced legislation seeking to compel President Donald Trump to withdraw from the Iran conflict, even as divisions emerged within Republican lawmakers over continued military action.

Foreign Outflows Continue

Foreign Institutional Investors (FIIs) turned net sellers after three consecutive sessions of buying and sold equities worth ₹2,457.49 crore on Tuesday, according to exchange data.

Despite weakness in the currency market, domestic equities ended higher. The Sensex gained 117.54 points to close at 75,318.39, while the Nifty advanced 41 points to settle at 23,659.

The rupee’s continued decline has emerged as a key concern for policymakers and businesses as higher import costs, elevated crude prices and foreign capital outflows continue to weigh on the broader macroeconomic environment.