Rupee hit record low of 95.34 against US dollar as oil price rises
The domestic equity sales during the West Asia crisis also contributed to the decline of the rupee
The rupee touched a record intraday low of 95.34 against the US dollar on Thursday before trading at 95.25 in mid-session trades, as the Brent crude oil price hit USD 122.11 per barrel amid volatility in West Asia that kept the currency under pressure.
The domestic equity sales during the West Asia crisis also contributed to the decline of the rupee.
In the meantime, the US Fed maintained interest rates despite significant inflation pressure driven on by rising oil prices.
The rupee opened the day at 95.01 against the dollar on the interbank foreign exchange market, but it dropped 46 paise to reach a record intraday low of 95.34. The local currency was down 37 paise at 95.25 during the afternoon session.
The rupee fell 20 paise against the US dollar on Wednesday, closing at an all-time low of 94.88.
Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, said the main effect on the rupee has been from the rising oil prices, which touched USD 120 per barrel and looked headed for further upside as the US continues with its blockade of Iranian ports, while Iran does not allow any ship/tanker to pass through Strait of Hormuz.
Meanwhile, the exchange data stated that foreign institutional investors sold stocks valued at about Rs 2,460 crore on Wednesday.
About half of India’s natural gas demands and 88 per cent of its crude oil needs are fulfilled by imports, with Strait of Hormuz being the main route.
The rupee has dropped by almost 5 per cent so far in 2026, following a similar decline last year. During this time, India’s external sector has been dealing with ongoing challenges, such as trade wars with the US, weak capital flows, and, most recently, the worst energy supply disruption in recorded history.
