The Indian rupee weakened past the 96-per-U.S.-dollar mark for the first time since May 22, as higher crude oil prices and renewed geopolitical tensions weighed on the currency.
The rupee has weakened in six of the 10 trading sessions so far this month. On Tuesday, it depreciated by as much as 30 paise to 95.62 against the U.S. dollar.
The move came after oil prices climbed more than 2%, lifting Brent crude above $85 a barrel for the first time in a month. The rally followed U.S. President Donald Trump's announcement that the United States would impose shipping fees on vessels using the Strait of Hormuz and reinstate a naval blockade of Iranian ports, raising concerns over crude supply from the Persian Gulf.
Brent crude futures for September delivery rose as much as 2.8% before trading 2.14% higher at $85.11 a barrel. U.S. West Texas Intermediate crude for August delivery gained 2.27% to $79.91 a barrel, extending Monday's rally of nearly 10%.
"The Indian rupee declined sharply amid a surge in crude oil prices and renewed geopolitical concerns. As a major oil-importing currency, the rupee came under pressure and emerged as the weakest performer among Asian currencies. In the near term, spot USDINR is expected to consolidate within the 94.90 to 96.00 range," said Dilip Parmar, senior research analyst at HDFC Securities.
Nandish Shah, deputy vice president at HDFC Securities, said the rupee remained under pressure as crude prices rose.
"The Indian rupee weakened sharply, depreciating by 30 paise to close at 95.62 amid rising crude oil prices and renewed geopolitical concerns. As a major oil-importing currency, the rupee remained under pressure and was the weakest among Asian peers," Shah said.
The latest U.S. measures renewed concerns about oil supplies from the Persian Gulf, with investors assessing the impact of tighter restrictions on one of the world's busiest crude shipping routes.
Trump said the United States would charge ships transiting the Strait of Hormuz "at the rate of 20% on all cargo shipped", describing the U.S. as the "guardian" of the strategic waterway. In a post on Truth Social, he also said Washington would reinstate its blockade of Iranian ports near the strait.
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