The rupee is now on a nine-day losing streak, losing around 2.5% of its value and repeatedly hitting fresh record lows against the US dollar. As the rupee slipped near the Rs 97 mark this week, concerns around India’s currency weakness have sharply intensified.
But is the rupee the only Asian currency under pressure right now? Not exactly.
Several Asian currencies have weakened against the US dollar this year as rising US Treasury yields, geopolitical tensions in West Asia and investor demand for safer assets strengthened the dollar globally.
However, economists say the Indian rupee has fallen harder than many of its regional peers, making it one of Asia’s weakest-performing major currencies in 2026.
HOW ASIAN CURRENCIES COMPARE AGAINST THE DOLLAR
WHY THE RUPEE IS FALLING FASTER THAN MANY ASIAN PEERS
According to Manoranjan Sharma, Chief Economist at Infomerics Ratings, India’s dependence on imported crude oil has made the rupee far more vulnerable during the ongoing global energy crisis.
“The Indian rupee’s recent depreciation has been sharper vis-a-vis many major Asian currencies, making it one of the region’s weakest performers in 2026,” Sharma said.
“While currencies like the Chinese yuan and Japanese yen have also weakened against the US dollar, their declines have been moderated by stronger export surpluses, larger external buffers, or active central-bank management,” he added.
India imports more than 85% of its crude oil needs. That means every sharp jump in crude oil prices increases India’s dollar demand, putting pressure on the rupee.
The ongoing Iran conflict and tensions around the Strait of Hormuz have already pushed crude oil prices sharply higher this year, worsening concerns around India’s import bill, inflation and external finances.
WHY SOME ASIAN CURRENCIES ARE HOLDING UP BETTER
The Chinese yuan has remained relatively stable because China has massive foreign exchange reserves, a large trade surplus and tighter state control over capital movement.
The Singapore dollar has also performed better due to Singapore’s strong external balances and exchange-rate-focused monetary system.
Commodity-exporting countries like Malaysia and Indonesia are getting support because higher oil and commodity prices improve their export earnings during global energy shocks.
Even the South Korean won, despite volatility, continues to benefit from strong manufacturing and technology exports.
India, however, faces a different challenge.
Unlike China, India does not run a large export surplus. Unlike Malaysia or Indonesia, it does not benefit from higher oil prices as a major energy exporter.
“India’s heavy dependence on imported crude and weaker export competitiveness intensify pressure on the rupee,” Sharma explained.
OIL PRICES, FII OUTFLOWS ADDING TO PRESSURE
The rupee’s weakness is not only about oil. Foreign investor outflows are also adding to the pressure.
As US bond yields rise, global investors are increasingly shifting money into safer dollar assets instead of emerging markets.
India has seen sustained foreign portfolio investor (FPI) outflows this year, weakening both the stock market and the rupee.
“The rupee’s decline reflects both global and domestic pressures,” Sharma said.
“Across Asia, currencies have weakened as the US dollar strengthened due to rising Treasury yields, safe-haven demand, and expectations of prolonged high US interest rates. In India’s case, the impact is sharper because the country imports over 80% of its crude oil,” he added.
WHY THE RUPEE MATTERS TO COMMON PEOPLE
A weak rupee affects much more than forex markets.
When the rupee falls:
- imports become more expensive,
- fuel costs rise,
- inflation risks increase,
- and pressure builds on transport and logistics costs.
This is already beginning to show up in India’s economy through rising petrol and diesel prices, increasing transport costs and concerns around imported inflation.
Economists warn that if crude oil prices remain above $100 per barrel for a prolonged period, the rupee could remain under pressure despite RBI intervention.
That could eventually impact household budgets through costlier fuel, goods and services.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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