The Indian Rupee depreciated by 2 paise, closing at 94.97 against the US dollar on Wednesday, September 2, 2026, according to financial market data. The currency opened at 94.97 in early trade, moving within an intraday high of 94.83 and a low of 94.99. On the preceding Tuesday, the rupee had settled at 94.95 against the US dollar, marking what had been its strongest performance in nearly two months.
The rupee's decline was primarily influenced by a strengthening US dollar, rising Brent crude prices, and escalating geopolitical tensions. The dollar index, which measures the greenback against a basket of six major currencies, rose 0.11 percent to 99.79, reaching its highest level since August 17. Brent crude prices surged to $95 per barrel. Additional downward pressure stemmed from expectations of a September interest rate hike by the US Federal Reserve and rising US Treasury yields, with the 10-year Treasury yield exceeding 4.8 percent for the highest level since January 2025.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, stated that the dollar continues to benefit from its safe-haven status, while the surge in Brent and associated inflation concerns have lifted expectations of a September Fed rate hike, providing additional support to the dollar.
Jateen Trivedi, vice president and research analyst at LKP Securities, noted that the positive growth outlook is helping offset pressure from higher oil prices and keeping sentiment towards the rupee stable. Trivedi added that crude prices, dollar movement, and foreign institutional investor flows will remain key triggers, projecting a rupee trading range between 94.70 and 95.40 in the near term.
Despite the session's depreciation, the Reserve Bank of India has maintained an active monitoring posture. The RBI is expected to intervene to manage currency stability amidst global economic volatility. For Indian importers, a weaker rupee translates directly to higher costs for imported goods, particularly crude oil, which can expand the country's import bill and contribute to domestic inflationary pressures.
