The Indian rupee declined to its weakest level since mid-March in early trade on Tuesday, as a slump in the euro sharply raised the dollar index, and demand for the greenback from state-run banks added to the pressure.

The Indian rupee has hit a four-month low, reaching 86.8725 against the US dollar . The fall was largely fueled by a weaker Euro and strong demand for dollars from state-run banks. A weaker rupee could make imported goods more expensive, potentially raising the daily living costs for consumers in the country.

The rupee depreciated 12 paise to close at 86.82 (provisional) against the U.S. dollar on Tuesday (July 29, 2025), weighed down by a jump in the U.S. dollar index and a surge in crude oil prices. Forex traders said month-end dollar demand from Oil Marketing Companies (OMCs) and importers further pressurised the rupee.