The Indian rupee is expected to weaken at the open on Monday, with traders anticipating a slide past the 96.50 level against the US dollar.
The pressure stems from a renewed rally in global crude oil prices, which has extended over the weekend and threatens to widen India’s trade deficit.
The move marks a sharp reversal from the previous week, when Indian equity benchmarks gained nearly 1% supported by softer oil prices and declining volatility.
Brent crude prices climbed further in the session, driven by persistent supply concerns linked to tensions in the Strait of Hormuz.
For India, the world’s largest crude importer, higher energy costs directly impact the current account balance and put downward pressure on the domestic currency.
The move marks a sharp reversal from the previous week, when Indian equity benchmarks gained nearly 1% supported by softer oil prices and declining volatility.
The rupee’s recent strength had been bolstered by a significant drop in global oil prices, which had slipped below levels seen prior to the escalation of tensions with Iran.