Rupee sees worst single-day fall in a month
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On Wednesday, the rupee reacted to rising crude oil prices after US President Donald Trump declared that the Iran cease‑fire was over, the United States launched strikes on Iran, and Iran attacked a Qatar‑flagged tanker near the Strait of Hormuz. Government securities (G‑Sec) yields also rose sharply following the oil price increase.
India relies on imports for roughly 90 % of its crude oil needs. Consequently, higher oil prices directly swell the import bill, push up inflation, widen the fiscal deficit and strain the balance of payments.
The rupee recorded its steepest one‑day decline in roughly a month, falling 60 paise to close at 95.56 per dollar from the prior close of 94.96. During the session it dipped as low as 95.60 per dollar.
Brent crude jumped more than 3 % and is rapidly approaching the $80‑per‑barrel threshold.
The rupee had gained 44 paise on Thursday, settling at 94.96 per dollar compared with the previous close of 95.40.
Dilip Parmar, research analyst at HDFC Securities, noted that the rupee suffered the biggest loss among Asian currencies, dragged down by a sharp spike in crude oil prices and a risk‑off mood following President Trump’s statement that the Iran cease‑fire was ending.
“Geopolitical tensions have pushed up the risk premium amid heightened volatility. In the short run, USD/INR is likely to encounter resistance near 95.80 and support around 94.95, with the tilt now toward dollar bulls,” he added.
UBS India’s chief economist, Tanvee Gupta Jain, said that the RBI’s recent steps to boost foreign‑currency inflows—such as incentives for FCNR(B) deposits and relaxed external borrowing rules—could draw an extra US$50‑60 billion and help steady the rupee.
“However, a portion of those inflows could be neutralized if the RBI decides to unwind part of its large forward FX position, especially at shorter maturities. We keep our FY27 year‑end USD/INR forecast at 96, citing ongoing headwinds such as the need for stronger net FDI inflows, threats to IT‑services exports from AI‑driven disruption, and potential dollar strength if the Fed raises rates,” she explained.
Meanwhile, the yield on the benchmark 10‑year G‑Sec (6.94 % 2036 GS) rose 7 basis points to finish at 6.76 %, up from the prior close of 6.69 %. The security’s price fell 49 paise to close at ₹101.24, down from ₹101.73 previously.
Published on July 8, 2026
