Overview
- The rupee, which had rallied for two sessions, slipped on Friday to close near 94.47 per dollar after reports of exchanges of fire near the Strait of Hormuz sent Brent back to about $100–101.
- Earlier this week the currency jumped as talk of a short US–Iran memorandum to end hostilities pulled Brent below $100 and boosted risk appetite, helped by reported RBI dollar sales and stop‑losses in offshore trades.
- Oil matters for the rupee because India buys much of its fuel from abroad, so refiners need more dollars when crude rises, which weakens the local currency and can pressure household fuel costs and inflation.
- The RBI has been active in the market and, according to Bloomberg, is evaluating a revival of foreign‑currency bond sales by state lenders to draw in dollars and stabilize the exchange rate.
- Structural drags persist, with BMI citing $13.4 billion of March capital outflows and highlighting India’s heavy energy‑import bill and Gulf‑linked remittances, and it projects the rupee to hover near 95 per dollar by end‑2026.