Rupee Plummets as Crude Oil Prices Surge Above $106 Per Barrel

The Indian rupee plummeted to its lowest level in a week on Thursday as crude oil prices surged above $106 per barrel, driven by concerns over supply disruptions linked to the Iran conflict.

The rupee fell 0.23% to settle at 95.96 against the US dollar, while the yield on the benchmark 10-year government bond rose to its highest since May 21, reaching 7.11%. Short-term bonds also saw a significant selloff, with the yield on the five-year government bond hardening by 8 basis points to settle at 6.82%.

Brent crude oil prices have been increasing steadily in recent sessions due to concerns over supply disruptions linked to the Iran conflict. The US Treasury yields also rose, with the five-year yield moving above 5%, adding to pressures on emerging-market currencies.

Market participants attributed the rupee's decline to softening Asian currencies and a sluggish domestic equity market, compounded by the rebound in crude-oil prices and elevated bond yields.