The Indian rupee dropped to its weakest level in two months, ending 0.5 per cent lower at 96.3150 per dollar — its sharpest single-day fall in more than two months, according to The Hindu BusinessLine.

The slide came on October 1 as global bond yields surged to decadal highs and oil prices jumped, deepening pressure on the currency, which was already hurt by foreign portfolio outflows. State-run banks’ dollar sales limited the fall.

Analysts attributed the fall to elevated US Treasury yields, which reached multi-decade highs, and aggressive foreign selling of Indian equities. Elevated yields make risk-free American bonds more attractive, pulling foreign money out of emerging markets.

Rising crude prices added to the pressure. Brent crude climbed to about USD 100.8 a barrel amid heightened geopolitical tensions. India, one of the world’s largest oil importers, faces a wider trade deficit when crude costs rise.

The rupee’s weakness on Thursday accompanied a sharp stock-market fall: the Sensex shed 570.59 points to 71,909.70 and the Nifty lost 198.50 points to 22,421.95, with foreign investors pulling about $3.6 billion out over five sessions.