Rupee breaches 96/$ mark for the first time

The rupee has closed at all-time closing lows in each of the five trading sessions this week

On Friday, the rupee crossed the 96‑per‑dollar threshold for the first time after US President Donald Trump’s latest social‑media post warning that the West Asian conflict would continue lifted crude oil prices.

Moreover, sustained selling by foreign portfolio investors in India’s equity markets added downward pressure on the rupee.

Nevertheless, the rupee ended just under the 96 level, as the Reserve Bank of India intervened through dollar sales conducted by state‑owned banks.

The Indian currency also recorded intraday lows, touching 96.14 and 95.9650 — roughly 20 paise weaker than the prior close of 95.7625.

The rupee posted fresh closing lows in every one of the five trading sessions this week, finishing the week roughly 1.57 % lower (about 149 paise) versus the previous Friday’s close of 94.48.

Anatomy of the fall

With Brent crude hovering near $108 a barrel, rising oil prices can severely affect the rupee, given that India sources about 90 % of its oil imports. Higher oil costs drive greater dollar outflows, weakening the rupee.

As US assets become a safe haven during the West Asian turmoil, foreign portfolio investors are offloading equity stakes in emerging markets such as India, boosting demand for dollars for repatriation and exerting pressure on domestic currencies.

Abhishek Goenka, Founder of IFA Global, remarked: “The market is one‑sided. Exporters are hesitant to hedge. Participants split into two groups — those betting on a stronger dollar/rupee and those awaiting RBI action or a sudden turn‑around and staying on the sidelines. Timing that turn‑around is tough, and hardly anyone is considering a short dollar/rupee position at present.”

“This view is mirrored in the price action — relentless pressure on the rupee with no relief in sight. The only factor keeping it in check is RBI dollar supply; should they withdraw, the dollar/rupee pair could surge.”

Ambit Capital noted in a report that the rupee’s 12 % year‑to‑date decline erodes the yield gap (255 basis points between India’s 10‑year G‑Sec and the US 10‑year Treasury), diminishing the appeal of fixed‑income arbitrage between India and markets such as the US once currency risk is considered.

Published on May 15, 2026