Mumbai, October 6, 2026 – The Indian rupee remained under pressure on Tuesday, weighed down by a combination of stronger US Treasury yields, euro-led dollar strength, elevated crude oil prices and persistent foreign equity outflows. Traders expect the Reserve Bank of India (RBI) to continue intervening in the foreign exchange market to manage excessive currency volatility.
The rupee was expected to open mildly weaker in the 96.32–96.34 range against the US dollar after settling near 96.29–96.30 on Monday. In early trade, it slipped further, with reports of levels around 96.39–96.41. The currency is currently about 0.6% away from its all-time low near 96.96 recorded in May.
Key pressure points include rising longer-dated US Treasury yields (with the 10-year and 30-year yields hitting multi-year highs), a dollar index climbing above 102 (supported by euro weakness amid European political and fiscal concerns), Brent crude hovering near or above $100 per barrel, and continued net selling by foreign portfolio investors (FIIs sold equities worth approximately ₹4,699 crore on Monday). These factors have increased demand for the dollar from oil importers and foreign investors.
The RBI has been active in the market, selling dollars when the rupee comes under strain to temper the pace of decline rather than defending a rigid level. Forex traders noted that while domestic equity gains and some moderation in the dollar index provided limited support, underlying dollar demand from FPIs and oil companies has remained firm
A sustained weaker rupee raises import costs (particularly for crude oil, of which India imports nearly 90%), potentially adding to inflationary pressures and increasing the cost of overseas education, travel and other dollar-linked expenses. Markets are also watching the ongoing RBI Monetary Policy Committee meeting for any cues on the policy stance amid these external challenges.
Overall, the external environment remains challenging for the rupee, and participants expect the central bank to prioritise orderly movement and volatility management in the near term.