Rupee sinks past 96 to a two-month low

The rupee fell to its weakest level in two months on Thursday as a surge in global bond yields and crude oil above $100 a barrel battered the currency. The slide pushed the currency past the key 96-per-dollar mark, deepening pressure on an already bruised market.

The Indian rupee ended 0.5 per cent lower at 96.3150 against the US dollar on Thursday, October 1 — its sharpest single-day fall in more than two months. State-run banks sold dollars through the session, which limited the damage, but the currency still breached the key psychological barrier of 96.

The fall was driven by global factors: bond yields hit decadal highs and Brent crude climbed toward $100.8 a barrel, both punishing import-heavy economies. Because India buys most of its oil abroad, costlier crude widens the import bill, stokes inflation and dents corporate margins.

The currency was already weakened by heavy foreign selling, with overseas investors offloading nearly $27.8 billion of Indian shares this year, according to market data. A weaker rupee raises fuel and import costs for households, making the coming RBI policy meeting closely watched.