Rupee slides below 96 per dollar as oil prices rise and US yields climb

Rupee slipped 16 paise to 96.13 per dollar in early trade on Tuesday, September 29, 2026, breaking the 96‑per‑dollar barrier. The interbank market opened at 96.03 before sliding to 96.13, down from Monday’s close of 95.97. Traders pointed to firm crude oil prices and rising U.S. nominal and real yields as the main pressure, saying both are pulling portfolio flows out of emerging markets like India. Brent crude futures rose 1.51% to $106.87 a barrel as worries grew over supply disruptions in the Strait of Hormuz. The dollar index edged higher to 101.23, up 0.04%. Anindya Banerjee, head of commodity and currency research at Kotak Securities, warned that the rupee could test 96.50 soon and that a clear break above that level would open the path toward 98, with major support around 95.50. He noted that domestic fundamentals remain strong, citing an 8% rise in industrial output in August and a completed RBI bond‑sale programme that attracted strong demand and kept the market orderly. On the equity front, the Sensex fell 503 points to 72,260.09 and the Nifty dropped 151 points to 22,626.50. Foreign Institutional Investors sold equities worth ₹5,353.22 crore on a net basis on Monday. ## Context The rupee often moves with oil prices and U.S. yield changes because higher oil raises import costs and higher yields make dollar assets more attractive, prompting capital outflows from India. RBI’s bond sales aim to manage liquidity and support the currency.