Rupee sinks to fresh record low vs dollar: Latest updates

The rupee hit a fresh record low of 96.11 against the US dollar during Friday’s trade before trimming losses to settle at 95.97. The domestic currency recovered around 20 paise from the previous day close.

However, the rupee remained under pressure due to elevated crude oil prices, persistent strength in the dollar, and growing concerns around the prolonged West Asia conflict.

Friday’s fall marked the latest in a series of record lows for the rupee this week. The sharp decline also came days after Prime Minister Narendra Modi called for measures to conserve the country’s forex reserves.

Analysts say the forex market continues to reel under pressure from anticipated shocks from a prolonged crisis in West Asia that has, since its onset in late February, effectively left the Strait of Hormuz shut.

Many economists have cut their growth forecasts for the Indian economy while revising upwards their inflation projections, while the official wholesale price reading stood at the highest level recorded in nearly four years.

Key reasons behind rupee depreciation

According to analysts, three factors are primarily denting the domestic forex market:

• West Asia tensions and Strait of Hormuz disruptions; twin deficits
• Capital outflows; persistent FII selling
• Elevated crude oil rates for long
• Strengthening dollar
• Inflation pressure
• Import dependence on crude and gold (these indirectly add pressure on INR)
• Uncertainty around central-bank policy
• Domestic growth or sentiment shocks

Here are 10 key things to know about the currency market

• At the current level, the rupee has depreciated 6.9 per cent on a year-to-date basis, cementing its position as the worst-performing Asian currency.
• The dollar index, which gauges strength in the greenback against six peers, was last seen trading up 0.4 per cent on Friday afternoon in India.
• Experts have warned that cooling crude oil prices will be a major factor for any relief in the rupee against the US currency.
• This week, Moody's Ratings cut its 2026 GDP growth forecast for India by 0.8 percentage points to 6 per cent, citing muted private consumption and industrial activity amid elevated oil and gas costs.
• Brent and WTI crude oil prices were quoting at $109.4 and $104.9 a barrel, respectively, at the last count. At this level, benchmark Brent has surged about 51 per cent since the onset of the conflict involving joint US-Israeli strikes against Iran on February 28.
• Some analysts believe expectations of crude oil prices remaining elevated for longer are putting further pressure on the forex market.
• India meets more than 90 per cent of its crude oil requirement and about half of its natural gas demand through imports.
• Domestic petrol and diesel prices were hiked by around Rs 3 per litre across major metros, including Delhi and Mumbai, earlier on Friday — the first upward revision in four years. Analysts say the move is likely to increase pressure on household budgets through higher transport and logistics costs.
• On Tuesday, RBI Governor Sanjay Malhotra warned that the government may need to raise petrol and diesel prices further if the US-Iran conflict drags on.
• Earlier this week, traders were also tracking remarks by US President Donald Trump, who said the ceasefire between America and Iran was “on life support”. Some experts said the comments weakened early hopes of a resolution in the West Asia conflict, which has now entered its 11th week.

Outlook

“Whenever uncertainty rises globally, the dollar usually becomes the market’s preferred safe place. For now, the rupee remains caught between policy support at home and global pressure from oil, inflation, and the dollar abroad,” said Amit Pabari.

“Technically, the 94.50–94.80 zone is expected to act as a strong support area for USDINR, while 96.00–96.20 remains a major resistance zone,” added Pabari.