The Indian rupee fell to 96.7750 per dollar on Wednesday, its weakest level since mid-May.

The currency closed at 96.78, down 43 paise. It is now just 18 paise shy of its all-time low of 96.96.

The fall came after the Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.5 per cent. It was the first hike in nearly four years.

The central bank also changed its stance from neutral to “calibrated tightening”. Some economists called the move hawkish.

Goldman Sachs expects the repo rate to rise by another 25 basis points in December.

Higher oil prices added to the pressure. Brent crude climbed above $102 a barrel on Thursday on worries about supply from the Middle East amid attacks on shipping in the Gulf and the Strait of Hormuz.

India relies on imports for most of its crude oil needs.

Traders are watching the 97 per dollar mark. A break past it could prompt importers to step up hedging while exporters hold back dollar sales.