The Indian rupee fell to around 94.8 per dollar, retreating after a brief stabilization as renewed strength in the greenback and shifting expectations for US monetary policy overshadowed lower crude oil prices. The currency came under renewed pressure after the dollar index climbed to its highest level in more than a year, driven by growing market expectations that the Federal Reserve could implement one or two additional interest-rate hikes before the end of the year. The rupee’s decline was partly cushioned by a sharp drop in oil prices, with Brent crude falling below $77 per barrel and posting losses of roughly 16.5% for the month. The decline in energy prices has been supported by signs that tanker movements through the Strait of Hormuz are gradually returning to normal. Additional support came from improving capital-flow dynamics. Foreign investment into Indian debt markets has strengthened, while equity-market outflows have moderated compared with earlier months.

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