The rupee opened at ₹96.05 against the dollar, down 7 paise from Monday’s close of ₹95.98, marking its first slip past the critical ₹96 support level in weeks.
US Treasury yields spiked 6 basis points to 5.24% on Monday, a near two‑decade high that has made dollar assets more attractive, tightening pressure on emerging‑market currencies.
Oil prices climbed on Tuesday after concerns over sustained supply disruptions in West Asia; the higher crude benchmark has weighed on the rupee by lifting import costs.
The Reserve Bank of India’s treasury officials note a recent build-up in foreign‑exchange reserves driven by special measures, giving the RBI more room for intervention.
Meanwhile, the RBI has net sold bonds worth ₹1 lakh crore this financial year, its biggest annual net sale in more than a decade, aiming to drain excess liquidity from the banking system.
Market participants now view the RBI’s intervention as likely if the rupee retreats further below ₹96, while the dollar index sits near a two‑month high. The Fed's 70% probability of a rate hike in October adds to the backdrop for a stronger dollar and a weaker rupee.