The Indian rupee fell to a two-month low on Thursday, closing at 96.3150 against the US dollar after breaching the psychologically important 96 mark.

The currency ended down 0.5 per cent, its sharpest single-day fall in more than two months. Dollar sales by state-run banks helped limit the decline, according to dealers.

A renewed global bond selloff and surging oil prices pressured the rupee. The 10-year US Treasury yield rose to 5.34 per cent, its highest since 2002, while Brent crude reclaimed the $100-per-barrel mark after China suspended October fuel exports.

Foreign portfolio investors continued to sell Indian equities, offloading shares worth Rs 9,484 crore on Thursday, according to exchange data. Persistent outflows have kept the rupee under strain for weeks.

Analysts expect the rupee to trade with a negative bias in the near term. They said intervention by the Reserve Bank of India could support the currency at lower levels.

A weaker rupee raises India’s import bill, particularly for crude oil, which the country imports in large quantities.