The rupee depreciated by 52 paise against the US dollar on Monday, recording its steepest drop in a fortnight, as escalating geopolitical tensions in West Asia and a sharp spike in crude oil prices weighed on investor sentiment and triggered foreign fund outflows.

The domestic currency opened at 93.30 per dollar in the interbank foreign exchange market and traded in a narrow band of 93.25 to 93.40 during the session. It eventually settled at 93.35, compared with Friday’s close of 92.83.

The decline follows heightened uncertainty after US-Iran talks failed over the weekend, alongside concerns over a potential US blockade of Iran’s ports, which has stoked fears of supply disruptions and pushed global crude oil prices above the $100 per barrel mark.

The rupee’s weakness comes despite recent regulatory measures by the Reserve Bank of India (RBI) aimed at curbing volatility in the currency market. According to a Reuters report, the central bank is also examining the methods used by large banks to unwind rupee arbitrage positions and is considering mandating the reporting of offshore rupee derivative trades.

In late March and early April, the RBI introduced two rounds of stabilisation measures. It first capped banks’ net open rupee positions at $100 million, replacing the earlier limit of up to 25 per cent of their capital. Subsequently, the central bank barred banks from offering rupee non-deliverable forwards (NDFs) to both resident and non-resident clients seeking to exploit arbitrage opportunities.

RBI deputy governor T. Rabi Shankar had earlier said the steps were aimed at easing “disruptive volatility” and addressing artificial tightening of liquidity in the currency market. “Our objective was to cool that phase,” he said.

Analysts attributed the latest fall in the rupee to a combination of rising crude prices and a strengthening US dollar amid global risk aversion.

“The rupee extended its losing streak, recording its sharpest drop in a fortnight, as crude prices surged following geopolitical developments,” said Dilip Parmar of HDFC Securities.

Echoing similar views, Anuj Choudhury of Mirae Asset Sharekhan, said continued gains in the dollar and elevated oil prices could exert further pressure on the rupee. He added that sustained foreign institutional investor (FII) outflows from domestic equities may also weigh on the currency.

Brent crude was trading 5.6 per cent higher at $100.52 per barrel, after touching $103.88 earlier in futures trade. Foreign portfolio investors have remained net sellers in April so far, with equity outflows amounting to $4.9 billion.