Rupee slips 4 paise to 96.39 against U.S. dollar in early trade
The Indian rupee declined to 96.39 against the U.S. dollar due to rising crude oil prices and foreign institutional investor outflows. Despite this, the Reserve Bank of India is expected to raise interest rates to combat inflation amid regional geopolitical tensions.
Why it matters
Currency fluctuations and interest rate hikes directly impact domestic inflation, corporate borrowing costs, and foreign investment flows in the Indian economy.
The rupee declined 4 paise to 96.39 against the U.S. dollar in early trade on Tuesday (October 6, 2026) over a rise in crude oil prices and sustained FII outflows.
However, positive sentiment in domestic equity markets and a weaker dollar index cushioned the local unit from further decline, forex traders said.
At the interbank foreign exchange, the rupee opened at 96.29 but fell to 96.39, down 4 paise from its previous close.
The rupee depreciated 10 paise to close at 96.35 against the U.S. dollar on Monday (October 6).
"The Reserve Bank has been protecting the rupee from its fall at 96.33, but the demand for the dollar from FPIs and oil companies has not come down despite oil falling to $100.63 per barrel and the dollar index to 102.12," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
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