The Indian rupee hit a new all-time low of 95.25 against the US dollar as escalating Gulf tensions and high oil prices spook investors.
Mumbai: The Indian rupee edged down by 2 paise on Tuesday, marking a new record low of 95.25 (provisional) against the US dollar. The decline comes as escalating conflict in the Gulf and attacks on critical UAE infrastructure push investors away from riskier emerging market assets and reignite global supply chain anxieties.
Market experts noted that Brent crude prices, currently hovering near $110 per barrel, continue to strain the economy of oil-dependent nations like India. Persistent outflows of foreign capital, driven by heightening geopolitical instability, have further dampened market sentiment.
Market movement and volatility
The local unit began the session at 95.30 at the interbank foreign exchange market. It faced major volatility during the day, hitting an intra-day nadir of 95.44 before recovering slightly to settle at 95.25. This follow-up decline comes after Monday’s sharp 39-paise drop to 95.23.
“We expect the rupee to trade with a negative bias on rising global crude oil prices as the Strait of Hormuz continues to remain closed. Dollar demand from importers and ongoing geopolitical tensions between the US and Iran may also pressure the rupee,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.
Choudhary added that while Central Bank intervention might provide a floor for the currency, the USD-INR spot price is anticipated to fluctuate between 95.10 and 95.55.
Global and domestic indicators
- Dollar index: The greenback strengthened slightly, rising 0.10% to 98.47.
- Crude oil: Brent crude futures were trading at $112.64 per barrel, a 1.57% dip from previous highs but still elevated enough to worry importers.
- Equities: Domestic markets mirrored the currency’s struggle; the Sensex dropped 251.61 points to finish at 77,017.79, while the Nifty fell by 86.50 points to 24,032.80.
Geopolitical context
The economic pressure follows a condemnation from Prime Minister Narendra Modi regarding drone strikes on the UAE port city of Fujairah. The attacks, which the UAE attributed to Iran, resulted in injuries to three Indian nationals and targeted a major oil industry zone. These incidents have severely strained the US-Iran ceasefire and led to the closure of the strategic Strait of Hormuz.
PTI
Published: 05 May 2026, 06:48 pm IST
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