The rupee depreciated 16 paise and slumped below the psychologically important 96 per dollar level in early trade on Tuesday (September 29, 2026), weighed down by elevated crude oil prices and persistent foreign fund outflows.

Forex traders said the rupee is under pressure largely due to the combination of firm oil and rising U.S. nominal and real yields, which together are drawing portfolio flows out of emerging markets, including India.

At the interbank foreign exchange market, the rupee opened at 96.03, then fell to 96.13 against the U.S. dollar, registering a fall of 16 paise from its previous close. On Monday (September 28), the rupee had settled at 95.97 against the American currency.

"We could see 96.50 in the coming days, and a clear break above 96.50 would open the door towards 98. Major support is now at 95.50.

"The domestic picture remains a source of strength — industrial output grew 8% in August — and the Reserve Bank has completed a large programme of bond sales this month with strong demand, which keeps the adjustment orderly," said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.23, higher by 0.04%.

Brent crude, the global oil benchmark, was trading higher by 1.51% at $106.87 per barrel in futures trade amid concerns over disruptions to crude supplies through the Strait of Hormuz.

On the domestic equity market front, Sensex tanked 503 points to 72,260.09 in early trade, while the Nifty dropped 151 points to 22,626.50.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹5,353.22 crore on a net basis on Monday (September 28), according to exchange data.