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The Indian rupee opened flat at 96.31 against the US dollar before weakening, pressured by higher oil prices, rising US Treasury yields, and foreign outflows.
By Anshul October 6, 2026, 9:28:20 AM IST (Published)
2 Min Read
The Indian rupee opened largely flat at 96.31 against the US dollar on Tuesday (October 6), compared with Monday’s (October 5's) close of 96.30, amid expectations that the Reserve Bank of India (RBI) will continue to intervene in the foreign exchange market to smooth the currency’s decline.
The rupee later weakened to 96.41 per dollar in early trade.
The currency has remained under pressure over the past month as the external backdrop has turned more challenging, with higher oil prices, rising US Treasury yields and foreign equity outflows adding to demand for the dollar.
The dollar index has climbed above 102, supported by weakness in the euro and higher longer-dated US Treasury yields. The euro has been weighed down by political uncertainty and fiscal concerns in the euro zone.
Meanwhile, the 10-year and 30-year US Treasury yields have risen to fresh 24-year highs as the recent sell-off in US government bonds continues. US services-sector activity remained broadly resilient in August, according to data released on Monday (October 5), while the survey's measure of prices paid by businesses for inputs also increased, pointing to persistent inflationary pressures.
The RBI has been active in the foreign exchange market, selling dollars when the rupee comes under pressure to temper the pace of its decline. Traders expect the central bank to continue smoothing volatility rather than necessarily defending a particular level.
A bank currency trader said the rupee could eventually move towards 97 per dollar if underlying pressures persist, while noting that recent RBI intervention does not suggest the central bank is committed to drawing a firm line at a particular level.
For Indian importers, a weaker rupee can increase the domestic cost of dollar-denominated purchases, including crude oil. For consumers, sustained rupee weakness can also raise the cost of overseas travel, education and other expenses linked to foreign currencies.
-With Reuters inputs
