SUMMARY
Monday saw a significant decline in the value of the Indian rupee, which for the first time fell below 95 against the US dollar. The currency experienced a historic moment when it hit a record low of 95.22. This puts the rupee on track for its worst fiscal-year performance in over a decade.
Both domestic and international tensions are contributing factors to the decline. The escalating conflict in West Asia, particularly with Iran, is the primary cause. The closure of the Strait of Hormuz has pushed Brent crude oil prices above $115 per barrel. Over 80% of India's oil is imported. The nation needs more dollars to pay for imports as oil prices rise. As a result, the rupee depreciates, and demand for the dollar rises.
Global uncertainty has grown at the same time. Money is being transferred by investors to safer assets. The US dollar is seen as a safe haven during such times. As a result, the dollar has increased against most currencies, including the rupee.
The significant outflow of foreign money is another important factor. Foreign Institutional Investors (FIIs) have pulled out their money from India. It is estimated that they have withdrawn over ₹ 111,377.35 crore from the markets in March itself.
Additionally, India's trade balance has gotten worse. The current account deficit has increased due to rising oil prices and declining global export demand. As a result, the rupee is more susceptible to shocks from outside sources.
Despite the fall, there have been some efforts to control the situation. The Reserve Bank of India (RBI) has stepped in to stabilise the currency. By the end of each day, banks must now cap their net open position at $100 million.
The instruction was issued on March 27, 2026, and applies specifically to positions in the onshore deliverable foreign exchange market, with compliance required by April 10, 2026. Additionally, the RBI has been involved in the currency markets, stepping in when necessary to stop excessive volatility.
Even with these measures, the rupee remains under pressure. Global events, particularly those pertaining to oil prices and geopolitical tensions, will have a significant impact on the outlook. For the time being, the breach of the 95 mark highlights the fragile state of the currency.
References:
Brent Crude Surges Past $126 Amid Escalating US-Iran Tensions
4 min Read Apr 30, 2026
Crude Falls Below $95, Triggers Rally in Oil-Sensitive Stocks; BPCL, HPCL shares jump over 4%
2 min Read Apr 15, 2026
Russia Bans Gasoline Exports From April 1; After Middle East Conflict Disrupts Global Energy Markets
4 min Read Mar 30, 2026
Bond Yields Surge as Crude Oil Crosses $100 Amid Iran War Concerns
3 min Read Mar 27, 2026
Oil Prices Plunge Below $100 After Donald Trump Pauses Iran Strikes
2 min Read Mar 25, 2026
Crude Oil: Lifecycle Fundamentals Amid Geopolitical Shock
7 min Read Apr 21, 2026
What Traders and Investors Should Expect in FY 2026-27: Market Outlook, Risks, and Strategy
4 min Read Apr 6, 2026
Can tyre stocks stay afloat as bears tighten their grip?
6 min Read Dec 20, 2021
Flattening the curve strategy for bear markets
2 min Read Apr 25, 2020
How to Trade on Crude Oil Spreads
6 min Read Jan 3, 2020
Top 3 AI Stocks Bought by FIIs in March 2026 Quarter
2 min Read May 14, 2026
NLC India, Godrej Industries, Cipla Lead Gainers; Kaynes Technology, GRSE and Data Patterns Drag
2 min Read May 14, 2026
Sugar Stocks Under Pressure After Government Bans Exports Till September 30
2 min Read May 14, 2026
Kaynes Tech Share Price Tumbles Over 19% - Here’s Why
2 min Read May 14, 2026
Stocks to Watch Today: JSW Steel, HAL, IRFC, Muthoot Finance, Tata Motors PV, Bharti Airtel, Zydus Lifesciences, Oil India
2 min Read May 14, 2026
For android only
