The Indian rupee declined 2 paise to 94.97 against the US dollar in early trade on Wednesday, as renewed US-Iran tensions, elevated crude oil prices and rising US Treasury yields weighed on investor sentiment.
Forex traders said the RBI is closely monitoring the rupee's movement, with Brent crude climbing to around USD 95 a barrel and the dollar index trading near 99.70, supported by increased demand for safe-haven assets amid heightened geopolitical uncertainty.
Meanwhile, expectations of a September US Federal Reserve rate hike have strengthened, pushing Treasury yields higher and supporting a broader recovery in the US dollar.