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INR vs USD: The Indian rupee slipped to a fresh all-time low against the US dollar on Monday, May 18, as higher crude oil prices, global uncertainty and a stronger dollar continued to pressure the domestic currency. After the opening bell, the rupee touched a record low of 96.20 against the US dollar before recovering slightly to trade near 96.01 around 9:21 am IST. The currency had closed at 95.97 in the previous trading session, according to report.
The sharp decline comes at a time when investor sentiment remains weak due to rising geopolitical tensions and concerns over global economic stability.
Indian Rupee Emerges as Worst Performing Asian Currency in 2026
According to a Reuters report, the Indian rupee has become the weakest-performing Asian currency so far in 2026. The domestic currency has already declined more than 5% against the US dollar since the beginning of the US-Iran conflict earlier this year. Data from Investing.com also showed that the rupee weakened around 0.87% over the last five trading sessions, reflecting sustained pressure in the forex market.
Why Indian Rupee Is Falling Against the US Dollar
Market experts said the rupee is facing pressure mainly because of rising crude oil prices, a stronger US dollar and continued uncertainty in global markets. India imports a major portion of its crude oil requirements, and higher oil prices increase the country’s dollar demand, putting additional pressure on the rupee.
Ongoing geopolitical tensions in West Asia
Analysts believe the ongoing geopolitical tensions in West Asia and strong dollar demand globally are also driving investors away from riskier emerging market currencies like the rupee. “Elevated crude oil prices, global uncertainty, and a stronger dollar continue to remain key risks for the rupee. However, the encouraging sign for markets is that both the Government and the RBI have already started taking proactive measures to manage the situation before it becomes more uncomfortable,” said Amit Pabari.
Crude Oil Prices Rise Above $111 Per Barrel
Crude oil prices continued their upward trend on Monday, adding more pressure on the Indian currency. According to Investing.com data, crude oil prices were trading 1.76% higher at $111.20 per barrel around 10:22 am IST, compared to $109.26 in the previous session. The rise in oil prices comes amid growing uncertainty in West Asia and continued tensions involving Iran, the United States and Israel.
Stronger US Dollar Adds More Pressure on Rupee
The US dollar also remained firm in global currency markets. Bloomberg’s US dollar spot index showed the dollar trading slightly higher at 99.321 during early US market hours. Analysts said rising demand for the dollar has increased because investors are seeking safer assets amid geopolitical tensions and uncertainty surrounding the ongoing West Asia conflict. Recent comments from Donald Trump urging Iran to quickly reach a peace agreement have further added to market uncertainty.
RBI and Indian Government Take Steps to Control Rupee Volatility
The Indian government and the Reserve Bank of India have already introduced several measures to reduce volatility in the currency market. Authorities imposed restrictions on the import of precious metals to reduce dollar outflows from the country. The RBI also capped the net open rupee positions of banks in the forex market to limit risks during periods of high volatility.
On April 10, the RBI introduced a $100 million cap on banks’ net open rupee positions to reduce speculative trading and maintain currency stability. n another move, the central bank restricted banks from offering rupee non-deliverable forwards (NDF) to both resident and non-resident clients in an attempt to reduce excessive speculation in the forex market. Despite these interventions, the rupee has remained under pressure due to weak global cues and rising oil prices.
Technical Outlook for USD-INR
According to Amit Pabari, the 94.80–95.10 range is expected to act as a key support level for the USD-INR pair, while the 96.00–96.50 range could remain a major resistance zone in the near term. Experts from Bank of America Global Research reportedly revised their forecast and now expect the rupee to weaken further to 98 against the US dollar by the end of 2026.
Risks Ahead for Indian Rupee
Market participants believe the Indian rupee may continue facing pressure this week if crude oil prices remain elevated and global tensions continue. Analysts said a stronger US dollar, rising global bond yields and uncertainty in international markets are likely to remain key risks for the domestic currency in the near term.
Disclaimer: This article is only for informational purposes and should not be considered financial or investment advice. Investors should consult certified financial advisors before making investment decisions.
