Rupee falls 33 paise against dollar as renewed US-Iran tensions lift oil prices

The Indian rupee opened weaker on Friday (May 8), slipping 33 paise to 94.58 against the US dollar from Thursday’s (May7's) close of 94.25, as renewed tensions between the US and Iran pushed crude oil prices higher and weighed on market sentiment.

The currency came under pressure after oil prices rebounded sharply following fresh hostilities between Washington and Tehran, which raised concerns over shipping disruptions through the Strait of Hormuz, a key global oil transit route.

Brent crude, which had fallen to around $96 per barrel on Thursday (May 7) amid hopes of easing tensions,

climbed back above $100 to trade near $101.50

after Iran accused the US of violating a month-long ceasefire. The US said it launched retaliatory strikes after Iranian firing on naval vessels transiting the strait.

Although US President Donald Trump said the ceasefire remained in effect and Washington was awaiting Tehran’s response to a fresh peace proposal, markets reassessed expectations of a quick de-escalation in the conflict.

Analysts said the rupee has remained closely tied to oil price movements in recent weeks, with volatility in crude triggering sentiment-driven swings in the domestic currency.

Market participants noted that measures announced by the Reserve Bank of India to support the rupee have provided only temporary relief, while persistent dollar demand from oil refiners and hedging activity by importers continued to pressure the currency.

Traders said a sustained recovery in the rupee would likely depend on stability in crude prices and moderation in dollar outflows linked to higher oil import costs.

-With Reuters inputs