Rupee Tumbles Amid Rising Oil Prices and US-Iran Tensions

The Indian rupee weakened against the US dollar in early trade on Wednesday due to rising oil prices, renewed tensions between the US and Iran, and expectations of a September Federal Reserve rate hike.

At the interbank foreign exchange market, the rupee opened at 94.97 against the US dollar, slipping by 2 paise from its previous close of 94.95. The dollar index, which measures the greenback's strength against a basket of six currencies, hovered around 99.75.

Brent crude prices rose to $95.59 per barrel amid concerns over disruptions to crude supplies through the Strait of Hormuz, further boosting expectations of higher US Treasury yields and a subsequent dollar rally.

Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, noted that RBI is closely monitoring the rupee's fall due to rising Brent crude prices and the dollar index reaching 99.70 on renewed risk aversion.