Rising crude prices and US Treasury yields pressure the rupee as geopolitical tensions escalate with new US levies on Iranian shipping.
The Indian Rupee fell to a seven-week low against the US Dollar, trading near 96.20 as oil prices and US Treasury yields climbed. The USD/INR pair extended losses amid heightened geopolitical risks and stronger US bond yields, reducing demand for emerging market currencies.
Crude oil futures on the MCX surged 4.24% to Rs. 7,673, marking a one-month high. India’s heavy reliance on oil imports makes the rupee particularly vulnerable to rising energy costs. Meanwhile, 10-year US Treasury yields rose 0.3% to 4.62%, nearing an 18-month peak, further weighing on risk assets.
The move follows US President Donald Trump’s announcement of a 20% levy on cargo ships passing through the Strait of Hormuz, a critical global oil chokepoint. The reinstated blockade on Iranian ports also contributed to the spike in oil prices and bond yields.