Rupee Weakens to 96.13 per Dollar, Sensex Falls to 72,260 and Nifty Drops to 22,626

Mumbai: The Indian rupee weakened past the 96-per-dollar mark in early trade on Tuesday as higher crude oil prices and continued foreign investor selling weighed on the currency.

At the interbank foreign exchange market, the rupee opened at 96.03 against the US dollar before slipping to 96.13. That was 16 paise below Monday’s closing level of 95.97.

Why Is the Rupee Falling?

Forex traders linked the rupee’s decline to expensive oil and rising US bond yields. Higher nominal and inflation-adjusted yields in the US can attract investment away from emerging markets, including India.

Brent crude futures rose 1.51 per cent to $106.87 a barrel amid concerns about possible supply disruptions through the Strait of Hormuz. Higher oil prices are closely watched in India because the country relies heavily on imported crude.

The dollar index, which measures the US currency against six major peers, edged up 0.04 per cent to 101.23.

What Levels Matter Next?

Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, said the rupee could move towards 96.50 in the coming days. A sustained move beyond that level could bring 98 into view, he said, while identifying 95.50 as a key support level.

Banerjee also pointed to stronger domestic data. Industrial output grew 8 per cent in August, while demand for bonds remained firm during the Reserve Bank of India’s sizeable bond sales this month. Those factors could help keep the currency’s adjustment orderly, he said.

Shares Also Decline

Weakness in Indian equities added to the cautious mood. In early trade, the Sensex fell 503 points to 72,260.09, while the Nifty dropped 151 points to 22,626.50.

Foreign institutional investors sold shares worth a net ₹5,353.22 crore on Monday, according to exchange data. Traders will monitor oil prices, US yields and foreign fund flows for the rupee’s next move.