Indian Rupee Weakens as Oil Prices Top $100

The Indian rupee weakened to 96.26 against the US dollar in early trade on October 5, 2026, continuing a trend of depreciation driven by Brent crude prices exceeding $100 per barrel. The currency remains under pressure from a strengthening US dollar index, multi-year highs in US yields, and heavy foreign portfolio outflows, including equity sales totaling ₹9,484.22 crore on the preceding Thursday.

To contain losses and curb volatility, the Reserve Bank of India has intervened through dollar sales. This activity contributed to a sharp decline in foreign exchange reserves, which fell by $18.343 billion to $747.557 billion for the week ending September 25.

Market participants are now awaiting the Reserve Bank of India's Monetary Policy Committee decision on October 7. Economists expect a 25 basis point rate hike to 5.50%. Additional risks to the currency include upcoming US services data, Federal Reserve meeting minutes, and potential confirmation of damage to Saudi Arabian infrastructure, which could further drive up oil prices.