Indian Rupee Hits Record 95.7950 per Dollar as U.S.-Iran War Drives 2026 Losses Past 6%
Updated
Updated · Reuters · May 13
Indian Rupee Hits Record 95.7950 per Dollar as U.S.-Iran War Drives 2026 Losses Past 6%
4 articles · Updated · Reuters · May 13
95.7950 per dollar marked a fresh record low for the rupee on Wednesday, with the currency ending at 95.7050 after overseas debt repayments and importer hedging extended its losing streak.
More than 5% of the rupee's slide has come since the U.S.-Iran war began, as the effective closure of the Strait of Hormuz pushed Brent crude up nearly 50% and worsened India's current-account and inflation outlook.
India imports over 90% of its crude and about half of its natural gas, leaving the rupee as Asia's worst-performing currency this year despite frequent RBI intervention and New Delhi's higher tariffs on gold and silver imports.
96.80 per dollar is Barclays' year-end forecast, while RBI Governor Sanjay Malhotra said the central bank may need to act if inflation becomes entrenched and warned fuel prices may have to rise if the conflict drags on.
DBS said a durable rupee recovery would likely require either a sharp drop in oil prices or a return of portfolio inflows, underscoring how tightly the currency's outlook is tied to the war-driven energy shock.
With its currency crashing and oil prices soaring, is India spiraling towards another 1991-style balance of payments crisis?
Could this devastating energy shock be the unlikely catalyst that finally breaks India's decades-long dependency on foreign oil?
As the U.S. fails to secure a vital waterway, can India's quiet diplomacy with Iran forge a separate path to energy security?
Indian Rupee Hits Record Low of 95.7/USD in 2026: Causes, Economic Impact, and Policy Response
Overview
In May 2026, the Indian Rupee hit a record low against the US Dollar, driven by a global shift as investors sought the safety of the Dollar. High US bond yields and expensive valuations in India made Indian markets less attractive, causing capital to flow out of the country. This outflow reduced support for the Rupee and increased downward pressure on its value. The situation was made worse by geopolitical tensions and rising oil prices, leading to inflation and economic challenges. Policymakers responded with interventions, but the Rupee’s outlook remains uncertain amid ongoing global and domestic pressures.