The rupee closed at a record low of 95.0875 against the dollar on Monday, weakened by a spurt in crude oil prices and elevated dollar demand. The currency lost 18 paise over Friday’s close.
Reuters reported there was dollar demand from maturing non-deliverable forward positions. Currency dealers said that the Reserve Bank of India (RBI) stepped into the market with dollar sales. On April 30, the rupee had hit a record intra-day low of 95.33.
Persistent selling by foreign portfolio investors (FPIs) in the Indian stock and bond markets has weighed on the rupee. FPIs have offloaded stocks and bonds worth about $20 billion so far in 2026.
Global Headwinds
The war in West Asia continue to keep oil prices high. On Monday, Brent crude oil futures moved up to levels of about $110 per barrel.
The domestic currency has already declined 5.8% since January, making it the worst-performing Asian currency, followed by the Philippine peso which has lost 4.5% and the Indonesian rupiah which has depreciated 3.9%.
“Rising crude oil prices are making the rupee weaker, and a firmer dollar index will add to the further downward pressure,” said Dilip Parmer, research analyst at HDFC Securities. Parmar expects the currency to stabilise if the RBI comes out with some measures to increase the dollar supply.
Market Outlook
Economists at UBS have forecast a value for the rupee of 96 to the dollar by the end of FY27. Economists at the brokerage noted the RBI can resort to the 2013 policy toolkit to support the rupee and the reserves. “Measures to increase capital flows need to be the key policy priority,” they said.
