The Sensex is down 14.9 per cent this year. In dollars it has lost more than 20 per cent.

By Strota Newsroom · 2026-09-30 · How Strota reports

The rupee crossed 96 to the dollar on Tuesday for the first time since mid-July. It opened at 96.05, traded as weak as 96.1450 early on, and closed almost flat at 95.98 after what the Economic Times described as likely central bank intervention. The paper attributed the pressure to a renewed surge in crude oil prices and the imported inflation that follows.

A day later, the same paper put a number on what that currency move has done to the stock market. The Sensex has fallen more than 20 per cent in 2026 in dollar terms, the steepest decline in 15 years. The Nifty is down 18.6 per cent in dollars. Both are the second-biggest laggards among major global markets, behind Indonesia.

In rupees, the same two indices are down 14.9 per cent and 13.1 per cent. The gap between 14.9 and 20 is the currency. A foreign investor converts dollars into rupees to buy Indian shares and converts back to dollars when reporting a return. The index shows one number. The return depends on the exchange rate on both dates, and the rupee did part of the losing.

The same move has a price on a shop shelf. As of 23 September, the consumer affairs ministry put soybean oil at Rs 166.87 a kg, up 14 per cent from Rs 146.44 a year earlier. Sunflower oil was Rs 194.26 a kg, up 19.5 per cent from Rs 162.56. Palm oil was Rs 153.89 a kg, up 16.3 per cent from Rs 132.28.

The link between the two is import dependence. India meets around 60 per cent of its edible oil requirement through imports, according to the Indian Vegetable Oil Producers Association. Those cargoes are bought in dollars and sold in rupees. When the rupee weakens, the same shipment costs more rupees before it reaches a warehouse, let alone a kitchen.

On 24 September the government used its lever on that chain. The basic customs duty on crude soybean oil and crude palm oil was cut to 5 per cent from 10 per cent. On crude sunflower oil it went to nil from 10 per cent. Refined soybean oil and refined palm oil came down to 27.5 per cent from 32.5 per cent, and refined sunflower oil to 22.5 per cent from 32.5 per cent. The notification kept a 19.25 per cent differential between crude and refined oils.

The government gave its reason in the release. It said the change would help moderate domestic edible oil prices, provide relief to consumers and mitigate inflationary pressures arising from a sharp increase in international prices. It described duty as an important component of landed cost and said the cut should facilitate transmission of the benefit through the supply chain.

The industry answered carefully. Sudhakar Desai, who heads the vegetable oil producers association, said lower import duties should improve landed costs and can provide some reduction in consumer prices. He also said the consumer-level impact depends on international prices, freight costs, exchange-rate movements, domestic availability and inventory levels. Those are the parts a duty cut does not touch.

The other lever belongs to the central bank, and it is expensive to use. Forex reserves hit a lifetime high of 785.71 billion dollars in the week ended 4 September, a record weekly jump of 44.9 billion dollars. Foreign currency assets rose 47.5 billion dollars to 648.17 billion dollars, while gold reserves fell 2.59 billion dollars to 113.82 billion dollars. Reuters reported that the RBI unloaded at least 8 billion dollars in a week to anchor the rupee, and concessional swap facilities have drawn over 136 billion dollars in new flows.

The rupee is not moving alone. August retail inflation was 4.82 per cent, up from 4.45 per cent in July, with food inflation at 5.95 per cent. Wholesale inflation was 9.92 per cent. Inside that, fuel and power prices rose 22.93 per cent from a year earlier, mineral oils 38.48 per cent, and crude petroleum and natural gas 34.41 per cent. Retail inflation has now been above the RBI 4 per cent target for three months running.

The import bill is where a currency move becomes a figure a ministry has to answer for. The Solvent Extractors Association estimates the edible oil import bill will rise 9 per cent to Rs 1.75 lakh crore in the oil year ending October, on higher volumes and rupee depreciation. Vegetable oil imports from November to August were 138.8 lakh tonnes, against 133.37 lakh tonnes a year earlier.

So what does the record establish, and what does it not. The duty cut is a fact with a date and a set of rates. That the cut reached a shelf is not established by any figure published so far. The government said it should facilitate transmission through the supply chain. The industry body listed four other inputs that decide the shelf price. The next retail print is the first place that shows up.

The central bank figure is the other gap. The record does not say how much was spent in the latest week, only that intervention happened and the rupee still closed near 96. What it does establish is that the rupee is the same number in both places a household meets it, in the shelf price of an imported oil and in the 14.9 per cent that becomes more than 20 per cent for anyone counting in dollars.

More money stories

• Phone prices rose 16 per cent, so brands pay your EMI interest
• Gold fell 5.1% in September, its worst month since June
• Jio's $3.8 billion IPO lands in the longest slump since 2001
• 2.5 lakh festive jobs, and employers short of takers
• UPI's 145 billion payments, then a 0.4 per cent merchant fee
• Three stocks are in the F&O ban for Monday: AMBUJACEM, BANDHANBNK and SAIL