FX.co ★ Rupee Retreats on Rising Oil Prices

The Indian rupee eased to about 95.3 per dollar, slipping from the four-week high reached last week, as a broad selloff in Asian equities and a spike in global crude oil prices stalled its recent advance. Other Asian currencies also weakened as optimism over a potential US–Iran peace agreement faded.

The reversal came on the heels of a strong rally on Friday, when aggressive Reserve Bank of India interventions to spur dollar inflows had buoyed the currency. Economists expect these measures to bring in $30–$50 billion by March 2027, helping to cap near-term downside risks for the rupee. However, mounting external pressures have quickly eroded those gains.

Sentiment was further hit by rising US Treasury yields after stronger-than-expected May jobs data reinforced expectations that the Federal Reserve could raise interest rates later this year. At the same time, investors weighed new figures showing that India’s real GDP expanded 7.8% year-on-year in the March quarter of 2026. Although slightly below the revised 8% growth in the previous quarter, the result comfortably topped market forecasts of 7.2%.