Indian Rupee Dips to 96.30 Amid Oil Prices and Foreign Outflows

The Indian rupee weakened by 5 paise to close at 96.30 (provisional) against the U.S. dollar on Monday, October 5, 2026. This decline was driven by rising oil prices and ongoing foreign fund outflows, keeping the rupee near the critical 96 level. Traders noted that improving risk sentiment provided some support, but attention is now focused on foreign capital flows and the Reserve Bank of India's upcoming monetary policy decision.

The rupee opened at 96.20 in the interbank foreign exchange market but dropped to an intraday low of 96.31 before settling at 96.30. On Thursday, October 1, 2026, the rupee had fallen below the key 96 per dollar mark to close at 96.25. Markets were closed on Friday, October 2, 2026, for Mahatma Gandhi Jayanti.

Dilip Parmar, research analyst at HDFC Securities, expects the rupee to consolidate between 95.95 and 96.50 in the near term, with a bias toward further depreciation. The Reserve Bank's Monetary Policy Committee began a three-day meeting on Monday and is expected to raise rates by 25 basis points, aligning with a hawkish stance due to rising inflation risks from escalating conflict in West Asia.

The last repo rate hike was in February 2023, when the RBI raised the rate by 0.25% to 6.50%. The dollar index was trading at 102.18, up 0.25%, while Brent crude rose 0.22% to $102.48 per barrel. On the equity front, the Sensex jumped 472.77 points to 72,382.47, and the Nifty climbed 133.80 points to 22,555.75.