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Rupee falls 15 paise to 95.56 as West Asia tensions spike crude
Rupee opened 15 paise weaker at 95.56 after US strikes on Iran and IRGC retaliation pushed Brent to $92.12. Watch the Strait of Hormuz for next move.
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The rupee opened 15 paise weaker against the dollar on Wednesday, touching 95.56 at the interbank market. The trigger was a fresh military exchange in West Asia. US President Donald Trump said Iran was responsible for downing an American Apache helicopter near the Strait of Hormuz and that the US "must" respond. The United States launched retaliatory strikes on Iranian targets. Iran's Islamic Revolutionary Guard Corps (IRGC) followed with drone and long-range missile strikes on US facilities across the region.
Forex traders said the [USD/INR](/markets/rupee-support-rbi-steps-in-as-ndf-contracts-mature) pair opened with a negative bias. The previous close was 95.41. The intraday low came early, and the pair held near that level through initial trade.
India's oil import bill is the direct transmission channel. The country imports roughly 85% of its crude requirements. Every dollar-per-barrel rise in Brent widens the trade deficit and puts pressure on the rupee. Brent crude futures traded at $92.12 a barrel, up 0.73% on the session.
Strait of Hormuz Military Exchange
The military exchange centers on the Strait of Hormuz, a chokepoint through which about 20% of global oil passes. A sustained disruption in the strait would push crude higher quickly. The last comparable spike came in 2019 after attacks on Saudi Aramco facilities. That event added $8–10 to Brent over two weeks.
Crude Oil at $92.12: The Transmission Channel
Higher crude hits the rupee through two paths. First, the trade deficit widens as import costs rise. Second, inflation expectations tick up, which complicates RBI rate policy. The central bank has been intervening in the forex market to smooth volatility. Sustained crude above $90 tests its willingness to burn reserves.
The dollar index held at 99.94, up 0.03%. A strong dollar adds to the rupee's headwinds.
Dollar Index Holds Near 100
The dollar index is hovering just below the 100 mark. A break above that level would strengthen the dollar against all emerging-market currencies, not just the rupee. The index is up about 2% this quarter.