Rupee Slips to 96.39 Against Dollar, Oil Prices and FII Selling Weigh

Mumbai: The Indian rupee slipped 4 paise to 96.39 against the US dollar in early trading on Tuesday, weighed down by firmer crude oil prices and continued foreign investor selling.

Gains in domestic equities and a weaker dollar index helped limit the currency’s losses, according to forex traders.

The rupee opened at 96.29 in the interbank foreign exchange market before weakening to 96.39. It had closed Monday at 96.35, after depreciating 10 paise during that session.

Dollar Demand Keeps Pressure Intact

Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors, said demand for dollars from foreign portfolio investors and oil companies remained strong despite declines in crude prices and the dollar index.

He said the Reserve Bank of India had been defending the currency around 96.33, although persistent dollar buying continued to challenge the rupee.

Brent crude futures traded 0.23% higher at $100.60 a barrel. The dollar index, measuring the greenback against six major currencies, eased 0.04% to 102.12.

RBI Policy Decision In Focus

Currency traders also monitored the RBI’s Monetary Policy Committee meeting, which began on Monday. The panel is expected to consider a 25-basis-point rate increase as the West Asia conflict raises inflation concerns.

The policy repo rate currently stands at 5.25%. The RBI last raised rates in February 2023, increasing the benchmark by 0.25 percentage points to 6.50%.

Rates remained unchanged through 2023–24 before the central bank began reducing them in 2025. The upcoming decision could provide direction for currency market sentiment.

Equity Gains Offer Some Support

Domestic stocks traded higher, helping cushion the rupee’s decline. The Sensex stood at 72,535.41 in early trade, while the Nifty gained 47.15 points to 22,603.10.

Foreign institutional investors sold Indian equities worth ₹4,699.14 crore on a net basis on Monday, exchange data showed.

Overseas selling, oil-related dollar demand and the RBI’s policy outlook remained key factors influencing the rupee’s near-term movement.