The Indian rupee depreciated sharply by 59 paise to settle at 95.55 against the US dollar on July 8, 2026, driven by a spike in global crude oil prices following geopolitical strikes. The domestic currency opened weaker and remained under pressure throughout the session, marking its lowest close in recent months.
Crude oil surge weighs on rupee
Global crude oil prices rose exponentially after the strikes, with Brent crude, the international benchmark, trading 6.16% higher at USD 78.73 per barrel in futures trade. The escalation in oil prices raised concerns about India's import bill and trade deficit, as the country relies heavily on imported crude to meet its energy needs.
According to analysts, the rise in crude oil prices is a significant headwind for the rupee, as it increases demand for dollars from oil importers. The rupee's fall was also attributed to sustained foreign fund outflows and a cautious stance in domestic equity markets.
Market impact and outlook
The rupee's decline adds to inflationary pressures, as a weaker currency makes imports costlier. The Reserve Bank of India (RBI) may face challenges in managing inflation while supporting growth. Market participants are closely watching for any intervention by the central bank to curb excessive volatility.
The Indian stock market also witnessed selling pressure, with benchmark indices closing lower amid global risk aversion. The rupee's movement will likely depend on further developments in crude oil prices and geopolitical tensions.
