Rupee Hits Record Low of 95.80 Against USD Amid Rising Crude Oil Prices and Geopolitical Tensions in West Asia

The Indian rupee faced a turbulent session on Wednesday, plunging to a fresh intra-day record low of 95.80 against the US dollar. The domestic currency eventually settled at 95.66, remaining precariously close to its all-time closing low. This decline comes as the market grapples with the dual impact of high crude oil prices and escalating geopolitical instability in West Asia.

Resistance Amidst Market Volatility

Despite the downward pressure, certain factors helped prevent a steeper collapse. Forex traders noted that possible intervention by the Reserve Bank of India (RBI), combined with a strategic hike in gold import duties, acted as a temporary buffer. However, these efforts were largely overshadowed by global economic headwinds.

"The rupee has emerged as the worst-performing Asian currency this year, weakening by more than 6 percent so far in 2026," traders observed. This slump is attributed to a potent mix of expensive oil, a surging US dollar, and persistent investor anxiety regarding regional conflicts.

Government Steps in to Curb Gold Demand

In a decisive move to protect foreign exchange reserves, the Indian government on Wednesday increased import tariffs on gold and silver, raising them from 6% to 15%. This policy change aims to reduce overseas purchases of precious metals, which significantly drain the nation’s dollar supply.

This follows an appeal made by Prime Minister Narendra Modi on Sunday, where he urged citizens to refrain from buying gold for a year. "India imports most of its gold requirements," the Prime Minister noted, emphasizing the need to conserve foreign exchange during these volatile times.

A Closer Look at the Numbers

The trading day at the interbank foreign exchange market was marked by significant fluctuations:

• Opening: 95.52 (up 16 paise from the previous record low).
• Intra-day High: 95.51.
• Intra-day Low: 95.80.
• Closing: 95.66 (a marginal 2-paise gain from Tuesday’s close of 95.68).

While the rupee struggled, the broader market showed mixed signals. The Dollar Index, which tracks the greenback against six major currencies, climbed 0.22% to 98.51. Meanwhile, Brent crude eased slightly, dropping 0.44% to $107.30 per barrel.

Domestic Markets and Inflation Trends

On the equity front, Indian benchmarks managed modest gains. The Sensex ended 49.74 points higher at 74,608.98, while the Nifty rose 33.05 points to finish at 23,412.60. However, Foreign Institutional Investors (FIIs) remained cautious, offloading equities worth ₹4,703.15 crore.

Adding to the economic complexity, fresh government data revealed that retail inflation ticked up to 3.48% in April. This rise was primarily driven by the surging costs of gold and silver jewelry, alongside price hikes in essential kitchen staples. Food inflation also saw an uptick, rising to 4.20% from 3.87% in the previous month.
 

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