Authors: N. Rishika
Abstract: Crude oil is an important commodity that significantly influences the economic and financial conditions of oil-importing countries such as India. Since India depends substantially on imported crude oil and international crude oil transactions are mainly denominated in U.S. dollars, fluctuations in crude oil prices can affect the demand for foreign currency and create pressure on the Indian Rupee–U.S. Dollar exchange rate. This study examines the impact of crude oil price fluctuations on the Indian Rupee–US Dollar exchange rate during the period from July 2024 to June 2026. The study focuses on Brent crude oil prices and the USD/INR exchange rate using 24 monthly observations of secondary data. Microsoft Excel and Power BI are used for data organization, analysis and visualization, while trend analysis and Pearson correlation are used to examine the movement and relationship between the variables. The study also considers selected major geopolitical events in West Asia and their associated movements in crude oil prices and the exchange rate. The correlation analysis resulted in a coefficient of 0.2007, indicating a weak positive relationship between Brent crude oil prices and the USD/INR exchange rate during the study period. The findings also show that crude oil prices experienced greater fluctuations during major geopolitical developments, while exchange rate movements were comparatively moderate. The study highlights the interconnected nature of global crude oil markets and India's foreign exchange market and provides useful insights into the relationship between energy prices and currency movements in the Indian economy.
