A sharp rise in crude oil prices have once again weighed on the rupee, which hit a fresh new intra-day low against the US dollar on April 30. 

The currency hit an intra-day low of 95.34 against the greenback, surpassing the previous low of 95.20 it hit on March 30. 

Why is the rupee under pressure? 

"A sharp rally in crude prices near $120 significantly worsened India’s import bill outlook. Continued FII outflows have added to the downside, keeping the currency under sustained stress," said  Jateen Trivedi, VP, research analyst - commodity and currency, LKP Securities. 

Brent crude prices touched $126 a barrel on April 30, 2026 amid no signs of end to the conflict between US and Iran, which has now been going on for two months. Brent crude oil has now doubled since the beginning of 2026, when it was trading at around $60 a barrel. 

For a country like India, which imports 85% of its oil requirements, surging oil prices will lead to our import bills surging, in turn driving up dollar demand. 

On the other hand, year-to-date till April 30, foreign portfolio investors have sold near Rs 1.92 lakh crore in equity, which is more than the Rs 1.66 lakh crore they sold through the entire 2025 calendar year. 

As FPIs sell equity and take money out, again demand for dollar rises, in turn putting pressure on the rupee. 

Corporates are also aggressively buying dollars in response to a hawkish Federal Reserve and mounting geopolitical concerns, pointed Dilip Parmar, research analyst at HDFC Securities. 

Analysts feel FPIs may continue to pullout from India's equity market, amid the conflict-driven uncertainty in global economy and as they seek investment opportunities in themes around artificial intelligence, which India lacks. 

Also, the longer the war prolongs, longer will be the disruption in oil and gas market, which will continue to push India's import bill up. So far, oil marketing companies have been absorbing the high crude prices. Should prices be increased, many things from transport to crude-linked raw materials will become expensive and this may impact consumption as companies will pass on the prices further. 

If the government continues to absorb the high prices, it will put pressure on government finances and hurt earnings of oil marketing companies. 

"Historically, an increase in global crude oil prices has resulted in a widening of India’s trade deficit as seen in FY12, FY13 and FY23 when global crude oil prices averaged close to $100 per barrel," pointed Rajani Sinha, chief economist at CAREEdge Ratings. 

In FY27, global crude oil prices are expected to remain elevated and this is expected to widen India’s merchandise trade deficit to  $422 billion, notably higher than the levels seen in recent years, added Sinha. 

RBI interventions eyed 

How the RBI reacts to the rupee hitting new low will be closely watched. RBI has on many occasions sold dollars to stabilise the rupee. But, RBI Governor Sanjay Malhotra has said on several occasions that it will intervene only if and when there is excessive volatility. 

"Since the current weakness is primarily driven by external global factors, the RBI appears to be monitoring the situation closely — which explains the relatively limited scale of intervention, so far," said HDFC Securities' Parmar. 

On March 29, RBI directed authorised dealers to ensure that their net open rupee positions in the onshore deliverable market would be maintained within $100 million at the end of each business day. The idea was that banks would wind up any excess forex positions, in turn creating additional dollar supply, in turn strengthening the rupee. 

Then on April 1, it took more measures to shore up the rupee. It barred banks from offering rupee non-deliverable forward (NDF) contracts to corporate clients. The measure was partially relaxed recently. 

NDF Is a financial derivative used to hedge or speculate on currency exchange rates. 

Will the RBI act again, should the rupee continue to fall? 

"We believe the RBI is not yet finished with its interventions. The central bank is likely analysing the situation closely and will probably introduce more impactful measures in the coming days," said Parmar. 

What next? 

Parmar expects the rupee could head towards 96 to the dollar mark. Trivedi sees support for the rupee around 95.45 to the greenback. 

With the markets closed over the next three days, all eyes will be on what happens in West Asia. Some thaw will be crucial for oil prices to cool, in turn reducing the pressures on the rupee