Rupee Sinks to Near-Record Low as Oil Prices and Geopolitics Bite

The Indian rupee is trading near its record low of 96.96 set in late May, as elevated oil prices and geopolitical risks weigh on the currency. The rupee closed at 96.56 on Friday, close to the psychologically important 97-per-dollar level.

Traders are tracking debt inflows under the FCNR(B) deposit scheme, which has seen $20.7 billion raised until July 17. Alok Singh, head of treasury at CSB Bank, said 'The response to the FCNR(B) scheme has been good, and the inflows from it are helping us manage the rupee around the 96.50 levels.'

However, 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 47% year-over-year surge in crude oil imports.