Rupee falls 2 paise to close at 94.97 against U.S. dollar
The Indian Rupee fell 2 paise to close at 94.97 against the U.S. dollar amid rising oil prices and geopolitical tensions. Market sentiment remains cautious due to potential U.S. Federal Reserve interest rate hikes.
Why it matters
Currency fluctuations and rising oil prices directly impact India's inflation and import costs, affecting the broader economy.
The rupee traded in a tight range and settled for the day at 94.97 (provisional) on Wednesday (September 2, 2026), recording a marginal loss of 2 paise as the support from foreign capital inflows was negated by weak local equities and a strong U.S. dollar.
Forex traders said the RBI is keeping a tab on the rupee's fall as Brent crude prices have risen to $95 per barrel and the dollar index is hovering around 99.80 on a bout of risk aversion on renewed U.S.-Iran tensions.
Moreover, market participants have raised the probability of a hike in interest rates by the U.S. Federal Reserve in September, pushing U.S. Treasury yields higher and triggering a broad dollar rally.
Investor sentiment also impacted after the 10-year U.S. Treasury yields rose above 4.8% - the highest since January 2025 - following softer-than-anticipated U.S. economic data.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in