The Indian rupee fell 10 paise to 94.66 against the US dollar during early trade Tuesday. The September 8 decline came as rising crude prices and Middle East tensions pressured investor sentiment.

The rupee opened at 94.49 in the interbank market before weakening to 94.66 during morning trading. The move extended Monday’s weakness, when the currency lost 13 paise and settled at 94.56.

Brent crude climbed toward USD 98 as escalating US-Iran tensions raised concerns over oil supplies. Brent futures traded at USD 97.61, gaining 0.63% as markets monitored potential Strait of Hormuz disruptions. Higher crude prices can increase India’s dollar demand and add pressure on the rupee. Rising oil costs also create fresh concerns around India’s import bill and inflation outlook.

Reserve Bank of India dollar sales helped limit the currency’s decline despite stronger oil prices. Foreign currency inflows under special schemes also provided support and kept the rupee range-bound. 

Anil Kumar Bhansali, Finrex Treasury Advisors executive director, highlighted the importance of RBI intervention. “RBI's intervention has been particularly important in preventing higher oil prices from translating into a weaker rupee,” Bhansali said. 

Bhansali expects the rupee to trade between 94.00 and 94.75 if current market conditions continue. The dollar index stood near 98.80 after falling 0.37%, offering some relief to emerging currencies.

Markets now await India and US inflation data for clearer signals on monetary policy. The Federal Reserve’s September 16 meeting could also influence dollar demand and emerging market flows. 

Domestic equities opened lower, with the Sensex falling 382.25 points and Nifty declining 97.80 points. Foreign institutional investors remained net buyers on Monday, purchasing equities worth Rs. 280.13 crore. 

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