Overview
- The rupee has lost about 2% in July and traded in the mid‑96s to near 97 per US dollar as of late July, putting it close to its record low.
- A renewed surge in crude oil prices driven by escalating US–Iran hostilities and threats to shipping has widened India’s import bill and pushed investors into the dollar.
- The Reserve Bank of India has intervened in a limited, episodic way—state‑owned banks were seen selling dollars around the 96.50 level—and the RBI reported net spot dollar sales of $6.104 billion in May.
- Banks and policy steps to attract foreign currency deposits have mobilized roughly $17 billion so far, but analysts say these inflows may be short lived and trader positioning shows growing bets on further rupee weakness.
- A weaker rupee raises near‑term inflation, subsidy and corporate cost pressures and could widen the current‑account gap, and markets will watch oil moves, US interest‑rate signals and the durability of foreign inflows for the currency’s path.