Indian Rupee Falls Amid US-Iran Strait of Hormuz Standoff

The Indian rupee opened lower against the US dollar on August 13, 2026, with opening rates reported between 95.36 and 95.40. The currency faces pressure from persistent dollar demand, elevated US Treasury yields, and a diplomatic standoff between the United States and Iran over the Strait of Hormuz.

President Donald Trump claimed the United States has "total control" over the waterway, a statement Iran rejected. Iranian officials warned they could keep the Strait of Hormuz closed until 2029. While Brent crude prices traded lower near $88 per barrel, the geopolitical instability continues to dampen investor sentiment.

To stabilize the currency, the Reserve Bank of India has actively intervened throughout the week by selling dollars, effectively capping the rupee's depreciation near the 95.41–95.45 range. Domestically, India's retail inflation for July rose to 4.45% from 4.38% in June, though it remains within the central bank's target range. The rupee has found partial support from foreign capital inflows into Indian equities and bonds during July.