The Indian Rupee fell to its weakest level in more than a week on Monday as rising oil prices weighed on Asian stocks and currencies, with investors increasingly concerned about the economic impact of higher energy costs and geopolitical uncertainty.

Dollar selling by state-owned banks, likely on behalf of the Reserve Bank of India (RBI), helped limit the decline, with the Rupee ending 0.2% lower at 95.9825 per Dollar.

Brent crude climbed nearly 4% to $108.20 a barrel. US President Donald Trump rejected Iran’s peace proposal but told Axios in a phone interview that he expected US negotiators to hold further talks this week.

Investors responded by driving bond yields higher and equities lower. MSCI’s broad gauge of Asian stocks fell nearly 1%, while Mumbai-listed shares dropped almost 1.5% to their lowest level since April.

With India importing nearly 90% of its crude oil needs, the Rupee is particularly exposed to the impact of a surge in Middle East oil prices, Reuters reports.

“Several investors just have an outright ‌bearish ⁠view on all EM Asia high-yield currencies, including the PHP, IDR and INR, given their vulnerability to higher energy costs,” according to analysts at Goldman Sachs.

Goldman Sachs said the Reserve Bank of India has the capacity to keep the Rupee within a 94-97 range, or at least control the pace of its decline.

A surge in capital inflows triggered by policy measures has given the central bank greater firepower to resist the broader market trend, although investors are watching closely to see how long that support can be sustained. Between 8 June and 18 September, the measures generated $143.6 billion in inflows.

“For now, 96 is the floor under ​INR and it doesn't seem like the RBI will allow a move past that,” a ​trader at a foreign bank said.