India Flags Rupee Defense as FY27 Priority as Currency Hits Record 95.75 per Dollar
Updated
Updated · The Indian Express · May 13
India Flags Rupee Defense as FY27 Priority as Currency Hits Record 95.75 per Dollar
8 articles · Updated · The Indian Express · May 13
95.75 per dollar marked a new intraday low for the rupee before it closed at a record-weak 95.63, as Chief Economic Advisor V Anantha Nageswaran said halting further depreciation is a central FY27 macroeconomic imperative.
Nearly 5% of the rupee’s slide since the West Asia war began reflects a widening external squeeze: higher crude and gold import costs, weak exports, muted FDI and remittances at risk, with India already Asia’s worst-performing currency in 2026 at down 6%.
$23 billion of foreign portfolio outflows since the war have added pressure to the balance of payments, while BofA said the current account deficit could exceed 2% of GDP, above the RBI’s long-term sustainable threshold.
51% jumps in Brent and butane and a 65% rise in urea and ammonia show the shock is structural, Nageswaran said, warning emerging economies would make a strategic error by assuming the pre-2020 global order will return.
Rs 1 lakh crore in projected April-June losses at state fuel retailers underscores the strain as India holds pump prices steady, after Prime Minister Narendra Modi urged households to curb imports, foreign travel and gold buying to conserve reserves.
With the rupee in freefall, can India’s austerity measures counter the permanent global economic shifts now taking hold?
India is urging public sacrifice to save its currency, but is this a prelude to more drastic, unconventional economic policies?
As AI threatens a 'ghost economy', is India's vital IT services sector heading for an unprecedented and rapid collapse?
Rupee at 95: Unprecedented Depreciation, Causes, and India’s Response to the 2026 Currency Crisis
Overview
In May 2026, the Indian Rupee plunged to a record low of 95.75 against the US dollar, marking it as Asia’s worst-performing currency and signaling a major crisis for India’s economy. This sharp depreciation followed a period of persistent weakness, despite aggressive interventions by the Reserve Bank of India that had temporarily stabilized the currency in 2025. The rupee’s fall was driven by a combination of global geopolitical tensions, surging oil prices, a strong US dollar, and sustained foreign investor outflows. These interconnected pressures created a perfect storm, highlighting the limits of domestic policy in shielding the rupee from external shocks.