The Indian rupee weakened on Wednesday, weighed by a jump in oil prices on renewed hostilities in the Middle East and weakness in local stocks while likely market intervention by the central bank capped losses.
Towards the end of the trading session, the currency was also supported by a Bloomberg News report that said India plans to cut taxes for foreign bond investors and remove caps on the overseas ownership of some bonds.
The rupee closed at 95.7050 per dollar, down 0.46% from its close of 95.2650 in the previous session.
Oil prices rose nearly 3% on Wednesday, extending gains from the previous session, after Iran launched ballistic missiles towards regional neighbours Kuwait and Bahrain and US forces conducted strikes on Iran’s Qeshm Island. Talks between Tehran and Washington showed little progress.
India’s benchmark equity index, Nifty 50 declined 0.4% even as optimism over the AI sector kept MSCI’s gauge of Asian stocks in the green.
Uncertainty over the next chapter in the US-Iran war has also injected significant complexity in the Reserve Bank of India’s monetary policy decision due on Friday.
A majority of economists polled by Reuters expect the central bank to keep policy rates unchanged. A section of market participants also expects the RBI to announce measures to support the beleaguered rupee alongside the policy outcome.
“While most economists expect the RBI to stay on hold at its June 3-5 meeting, the market will be looking out for hawkish signals to assess rate hike prospects,” said Sok Yin Yong, Asia fixed income analyst at Julius Baer.
RBI and SEBI have also tightened checks on overseas investments by firms and family offices, Reuters reported earlier.
Elsewhere, Asian currencies were mostly weaker on the day while equity futures pointed to a decline for shares on Wall Street as well.
Published on June 3, 2026
