The rupee depreciated 11 paise to 94.95 against the US dollar in early trade on Monday as the ongoing tensions in the Middle East continue to keep markets on edge.

Forex traders said Brent oil is hovering near $108, maintaining pressure on oil-importing economies like India.

Moreover, factors such as unabated foreign capital outflows amid rising geopolitical uncertainties dented investor sentiments further.

At the interbank foreign exchange market, the rupee touched 94.95 against the US dollar in initial trade, registering a fall of 11 paise over its previous close.

On Thursday, the rupee had settled at 94.84 against the American currency.

Stock exchanges and currency markets were closed on Friday on account of Maharashtra Day.

"The ongoing tensions in the Middle East continue to keep markets on edge. On one side, US President Donald Trump hinted that Tehran's peace proposal may not be enough, keeping uncertainty alive. That’s one reason why Brent crude is hovering near $108, maintaining pressure on oil-importing economies like India," said CR Forex Advisors MD Amit Pabari.

On the other hand, the US has indicated it may help guide neutral ships through the Strait of Hormuz, a move that could ease supply concerns slightly. So markets are stuck between fear and hope, and that confusion is reflected in currencies, Pabari added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.19, up 0.03 per cent.

Brent crude, the global oil benchmark, was trading higher by 0.34 per cent at $108.54 per barrel in futures trade.

Meanwhile, market participants are awaiting the election results in five states and one Union Territory in India.

"Currency markets usually don't react sharply to state elections like the one in West Bengal. However, they do respond to sentiment, and even a slight shift in investor confidence or political stability can have a marginal but noticeable impact on the rupee," Pabari added.

On the domestic equity market front, the 30-share benchmark index Sensex jumped 657.80 points to 77,571.30 in early trade, and the Nifty climbed 213.35 points to 24,215.10.

Foreign Institutional Investors offloaded equities worth ₹8,047.86 crore on Thursday, according to exchange data.

Meanwhile, Expenditure Secretary V Vualnam on Friday said the upcoming few quarters and the coming year would possibly have a "lot of stress points".

"The fiscal stress is indeed very much a reality, but at the same time... the capex would really be a priority item, which we would like to preserve and ensure that it continues at the budgeted level," Vualnam said at the ICPP Growth Conference organised by the Ashoka University.

Published on May 4, 2026