The Indian rupee weakened past the 76 mark to the dollar on Friday to touch its lowest level since mid-December, as the worsening crisis in Ukraine pushed Asian stocks to lows of 16 months, with traders watching for possible central bank intervention.

The partially convertible rupee was trading at 76.16/17 to the dollar at 0820 GMT, after touching 76.1750 – its lowest since December 17. The currency had closed at 75.91 on Thursday.

Traders said after the initial drop in the dollar/rupee, importers and banks rushed to buy the greenback amid lingering geopolitical risks.

Most emerging Asian currencies and stocks weakened on Friday amid heightened investor anxiety after reports that Russian forces had attacked a nuclear power plant in Ukraine.

“The markets will be volatile until the end of the war. With oil still holding, expectations of higher inflation have risen.

Oil prices rebounded as fears of Western sanctions that could disrupt Russian oil exports outweighed the possibility of larger supplies from Iran.

India imports more than two-thirds of its oil needs and soaring crude threatens to push up the country’s trade and current account deficit and put pressure on the rupee.

“We now expect CPI inflation to average 5.1% in FY22-23, down from 4.5% previously,” said Rahul Bajoria, an economist at Barclays.

“The surge in international commodity prices, particularly crude oil, is a major cause for concern. If international crude prices remain at current levels of $110/bbl, we expect domestic pump prices to increase by ‘at least 20% over the next few months.’

Traders said the central bank sporadically sold dollars through public banks around 75.70 to 75.90 levels in recent sessions, to avoid a sharp depreciation of the rupee.

India’s benchmark 10-year bond yield traded down 1 basis point on the day to 6.82%.