Rupee Slips Past 96 as Brent Oil Surges to Near $107

The Indian rupee has fallen to its weakest level in about two months, slipping past the psychologically important 96-per-dollar mark. This decline comes as global crude prices surge, with Brent oil rising over 1.5% to around $107 a barrel.

India relies heavily on imports for its crude needs, with close to 88% of its requirements coming from abroad. As oil prices increase, refiners and other oil companies need more dollars to pay for cargoes, lifting demand for the US currency in the local forex market and weighing on the rupee.

The strain is already showing in official trade data, with India's crude oil import bill jumping 48% year-on-year to $74.8 billion in April-August 2026, despite broadly unchanged volumes. This could widen the trade and current-account deficits and feed into domestic inflation if prices stay elevated.

Higher US bond yields, a firmer dollar index, and geopolitical uncertainty have also dampened appetite for emerging-market exposure, leading to portfolio outflows of about $3.7 billion from Indian assets so far in September. The RBI's defense of the rupee will be closely watched, with its foreign exchange reserves standing at $765.901 billion as of September 18.