The rupee weakened for
a second straight session on Friday as surging oil prices
spurred risk aversion, erasing gains made earlier in the week
and leaving the currency little changed, despite easing
expectations of further US rate hikes.
The rupee opened the session marginally higher at
94.79 against the US dollar, but turned lower in early trades to
hit a low of 94.9725. The currency ended 0.1% lower for the day at 94.9400, after depreciating by 0.4% on Thursday. It was little changed for the week, after rising 1.4% last week.
Oil prices rose in the latter half of the week including in
Asian hours, with the benchmark Brent crude touching a more than
five-month high, after attacks in Saudi Arabia by Yemen’s
Houthis stoked concern over further disruption to energy
supplies from the region.
The Brent crude contract was hovering around $114 per
barrel, and is on track to post a third straight weekly surge.
While facing a shock from oil prices, investors have been
reassessing technology trades and pulling back from riskier
assets on worries about stretched valuations for artificial
intelligence-led companies, leading to a selloff in stocks and
rising demand for safe-haven US Treasuries.
The odds of a rate hike by the Federal Reserve have dropped
to single digits from as high as 70% a month ago, which provided
brief relief to the rupee in the early session, but oil worries
outweighed the positive move.
Energy prices have remained elevated fuelling concerns about
inflation and imported energy costs, which hit the nation’s
current account calculations.
Currency traders also cited some residual flows linked to
the Jio Platforms initial public offering.
These flows, alongside the unwinding of dollar-long
positions triggered by the Reserve Bank of India’s latest
measures, had lifted the currency to a six-week high of 94.30
per dollar on Thursday, before importers stepped up dollar
purchases.
“The RBI’s recent FX measures are short-term stabilizers,
not necessarily unjustified, but insufficient to alter the
medium-term bearish outlook on the rupee,” Apoorva Javadekar,
chief economist at Shriram Research, said.
Published on October 23, 2026
