The Indian rupee is expected to open weaker on Wednesday, vulnerable to slipping past ​the 96-per-dollar mark once again as hopes for an imminent end ‌to the Middle East conflict have ebbed, keeping portfolio ​and merchant flows skewed against it.

The currency is ⁠expected to open in a 95.78 to 95.83 range, traders said, against its 95.68 previous close.

Iran said on Tuesday the U.S. had ‌violated a ceasefire by striking targets near the contested Strait of Hormuz, potentially complicating efforts to bring the ‌three-month-long war to a close. Brent crude fell in Asia ‌trading ⁠but stayed in the vicinity of $100 per barrel, weighing ⁠down oil-sensitive Asian currencies such as the Indonesian rupiah and Philippine peso.

Worries over the economic risks to India from the Iran war have kept ​foreign portfolio capital in a ‌steady exit mode with overseas investors selling more than $24 billion of Indian stocks and bonds between March and so far in May.

Alongside elevated energy prices and disrupted exports, ‌this has left India staring at a steep balance ​of payments gap for the fiscal year ending March 2027.

“Despite relatively strong macroeconomic fundamentals, structural import dependence continues ⁠to bias the currency lower,” Deepali Bhargava, regional head of research for Asia Pacific at ING, said in a note.

“We expect ‌USD/INR to end the year at 95.50, with risks skewed more towards gradual stabilisation than a disorderly weakening.”

Meanwhile, stocks in Asia advanced led by tech-heavy indexes in Korea and Taiwan while futures pointed to a muted start for Indian shares.

India’s position as the fifth-largest global market by capitalisation is under ‌threat as Taiwan closes in on the South Asian nation’s spot, powered ​largely by the rapid rise of chip-making major Taiwan Semiconductor Manufacturing Co.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 96.20; ⁠onshore one-month forward premium at 37 paisa

** Dollar index at ⁠99.12

** Brent crude futures down 0.8% at $98.8 per barrel

** Ten-year U.S. note yield at 4.48%

** As per NSDL ‌data, foreign investors bought a net $230.5mln worth of Indian shares on May 25

** NSDL data shows foreign investors sold a ​net $20.3mln worth of Indian bonds on May 25

Published on May 27, 2026