The Indian rupee endured its sharpest drop in more ​than a month on Monday to end at ‌it weakest closing level on record as a run-up ​in crude prices battered the currency after ⁠US President Donald Trump rejected Iran’s response to a US peace proposal.

The rupee fell nearly 0.9 per cent to 95.31 per dollar ‌in its steepest single-day drop since March 27, tracking losses in regional peers.

Brent crude rose ‌2.5 per cent to $103.8 per barrel as shipping through the ‌Strait ⁠of Hormuz, a key energy artery handling ⁠about a fifth of global oil and liquefied natural gas flows, remained paralysed.

India’s benchmark equity index fell 1.5 per cent and government bonds slid, with ​the yield on the ‌10-year benchmark jumping 6 basis points.

Over the weekend, Indian Prime Minister Narendra Modi urged a series of measures, including fuel conservation, fewer imports, as well as ‌reduced travel, as a surge in energy prices takes ​a toll on the country’s foreign exchange buffers.

Higher oil prices are a major ⁠risk for net energy importer India and threaten to widen the country’s current account deficit, slow growth and stoke ‌inflation.

“Structurally weak external funding conditions mean even a small widening of the current account deficit will continue to put pressure on the INR and FX reserves,” analysts at ANZ said in a note.

India’s foreign exchange reserves stood at $690.69 billion as of May 1, ‌per central bank data.

While the reserves are adequate on ​traditional metrics, such as the number of months of goods imports they can cover, they have ⁠come off their record high of $728 billion hit in ⁠February, before the war began.

Elsewhere in global markets, the dollar index was little changed, hovering just ‌shy of the 98 mark while equity futures pointed to a steady start for stocks on ​Wall Street.

Published on May 11, 2026