Rupee Hits Two-Month Low Amid Oil Price Surge

The Indian rupee has been declining against the dollar, reaching its lowest level in two months at 96.73 on Thursday. This comes despite the dollar index trading flat at 101.12. The rupee's year-to-date decline is 7.5 percent, making it one of the worst-performing Asian currencies.

The rise in Brent crude oil prices to above $100 a barrel for the first time in two months has contributed to the rupee's depreciation. Higher oil prices mean India must pay more dollars for imports, widening the trade deficit and putting downward pressure on the rupee.

India's persistent foreign capital outflows of $34 billion as of June are also creating demand for dollars, further exerting pressure on the currency. The RBI has intervened to sell dollars and support the rupee, but experts say this is only a temporary measure.