Rupee Slumps Below 96 in Early Trade

Mumbai: The rupee slumped below the 96-per-dollar level on Tuesday, depreciating 16 paise to 96.13 against the US dollar in early trade, weighed down by elevated crude oil prices and the ongoing West Asian conflict.

At the interbank foreign exchange market, the domestic unit opened weaker at 96.03 and slipped further to 96.13, marking a decline from Monday's close of 95.97. Forex traders attributed the pressure largely to a combination of firm oil prices and rising US nominal and real yields, which together are drawing portfolio flows out of emerging markets, including India.

Brent crude, the global oil benchmark, traded around 1.74 per cent higher at approximately $107.1 a barrel, adding to concerns given India's heavy reliance on crude imports to meet its energy needs. Domestic equities extended their decline in early trade, tracking broad risk-off sentiment after the Sensex tumbled 1,124 points to a six-month low in the previous session amid surging oil prices and wider geopolitical uncertainty.

Market participants noted that domestic fundamentals continued to offer some support, pointing to industrial output growth of 8 per cent in August and the Reserve Bank of India's completion of a large bond-sales programme this month, which drew strong demand and has helped keep the currency's adjustment orderly. The RBI's potential intervention in the foreign exchange market to contain excessive volatility remained closely watched by traders, along with global risk sentiment, oil price movements, and dollar demand from importers—all expected to influence the rupee's trajectory through the rest of the day.