Rupee Sinks to Near-Record Low Amid Oil Price Surge and Geopolitical Risks
The Indian rupee is near its record low due to rising oil prices and geopolitical tensions. The currency closed at 96.56 on Friday, close to its all-time low of 96.96 hit in late May.
Traders said the Reserve Bank of India (RBI) has been aggressively defending the 96.55-96.60 zone, but a further increase in oil prices or any new negative geopolitical development could test how far it's willing to intervene.
The RBI has been managing the rupee with the help of debt inflows under the FCNR(B) deposit scheme, which has seen good response and is attracting foreign capital.
Oil prices are now dictating how aggressively traders position themselves against the rupee. India's import bill increased in the first quarter of fiscal 2027 due to high oil prices, with June alone seeing a surge of 47% YoY to $14.6 billion.