Indian rupee ended July with its steepest monthly decline in recent years as higher crude oil prices and renewed geopolitical tensions weighed on investor sentiment. The currency closed at 95.55 against the US dollar, losing 59 paise in a single day. This marked a 6.3% fall in 2026 and a 10.2% drop over the past year, making the rupee the weakest performer among Asian currencies.
Brent crude surged 6% to 78.62 dollars per barrel after fresh US‑Iran clashes raised fears of supply disruption in the Strait of Hormuz. Rising energy costs have increased India’s import bill since the country depends on overseas supplies for nearly 90% of its crude needs. Analysts warned that this could worsen the current account deficit, push inflation higher, and strain fiscal balances.
Bond markets also reacted sharply. The 10‑year benchmark yield rose seven basis points to 6.76%, the biggest single‑day jump in four months. Traders expect further volatility until foreign currency non‑resident deposits provide stronger inflows.
Experts noted that the Reserve Bank of India likely intervened in spot and forward markets to limit deeper losses. Market watchers believe the rupee may trade between 94.5 and 96 in the near term, depending on oil prices and global risk appetite.
