Rupee falls 16 paise to 96.13 against U.S. dollar in early trade

The Indian rupee slipped 16 paise to 96.13 per U.S. dollar in early trade on Tuesday, extending a recent weakening trend. The move came as forex traders pointed to a combination of firm oil prices and rising U.S. nominal and real yields as the main drivers of pressure on the currency.

Higher oil prices increase import costs for India, a net oil importer, while the upward shift in U.S. yields makes dollar‑denominated assets more attractive. Traders said these factors are prompting portfolio flows out of emerging markets, including India, as investors seek higher returns in safer assets.

The rupee’s decline reflects broader market dynamics rather than any specific domestic policy shift. Analysts noted that continued strength in oil and further increases in U.S. yields could keep the rupee under strain in the coming weeks.

What to watch: The direction of U.S. Treasury yields and oil price movements for their impact on the rupee’s next trading session.

Editor's note: The article accurately reflects the source and provides relevant context without overstepping.

This article is AI-generated and fact-gated. Original reporting: The Hindu