Rising Oil Prices Push Indian Rupee Past 96 Per US Dollar

India's currency, the rupee, has slipped past 96 per US dollar after Brent crude oil prices hit $107.4 a barrel. This is bad news for India, which imports most of its oil and pays for it in dollars.

The Reserve Bank of India (RBI) has been defending this level, but it's getting harder as dollars leave the country due to capital outflows. Overseas investors have net sold $3.7 billion in Indian stocks and bonds in September, taking year-to-date outflows to $19.6 billion.

When oil prices rise and the rupee weakens, India gets a double hit: the fuel itself costs more, and each dollar of the import bill takes more rupees to buy. Companies often pass on these increased costs to consumers through higher transport costs and pricier deliveries.