The Indian rupee is anticipated to rise slightly at the start of trading on Monday, buoyed by a decline in oil prices following the United States’ announcement of intentions to assist ships stranded in the Strait of Hormuz. Traders are closely monitoring developments concerning US-Iran negotiations.
The rupee is projected to open within the range of 94.86 to 94.88 against the US dollar, after closing at 94.91 on Thursday, which marked an all-time low of 95.33. Indian financial markets were closed on Friday.
Brent crude’s July futures contract fell to approximately $105.50 during Asian trading hours, responding to US President Donald Trump’s remarks on Sunday that the US would take measures to help free stranded vessels in the Strait of Hormuz. Trump characterized this action as a humanitarian initiative for neutral nations.
However, analysts caution that the stagnation in peace talks is likely to curtail any significant decrease in oil prices. Ongoing negotiations between the US and Iran are focused on evaluating each nation’s responses.
Brent crude was last recorded trading around $108 per barrel. The rupee has faced ongoing pressure in recent sessions, having dropped nearly 2% over the preceding eight trading days.
This persistent depreciation is attributed to a cycle of high oil prices that has dampened market sentiment, increased hedging activities by importers, and heightened demand for dollars from oil refiners. Elevated oil prices have also deterred foreign investors from entering Indian equity markets. Portfolio outflows reached approximately $6.5 billion in April, with cumulative withdrawals in 2026 now at around $20.6 billion, exceeding the total outflows recorded for all of 2025 and adding further demand for dollars.
The outlook for the rupee remains challenging from both sentiment and cash flow perspectives. Additionally, a growing foreign exchange forward book held by the Reserve Bank of India poses another obstacle, according to a currency trader at a financial institution.
Published on May 4, 2026.
