The Indian rupee breached the 95-per-dollar mark on Thursday, hitting a record low before suspected intervention by the Reserve Bank of India (RBI) helped it recover. The currency closed at 94.91, down six paise from its previous close of 94.85.
Intra-day low and recovery
The rupee fell to an intra-day low of 95.33, declining around 0.5% and surpassing its earlier record level. The decline was driven by rising crude oil prices, which raised concerns over inflation, growth, and capital flows. However, the currency later pared losses during the session to end marginally weaker, indicating possible intervention in the forex market by the RBI.
Crude oil prices and Asian currencies
Pressure on the rupee intensified amid a sharp rally in crude oil prices, with levels near $120 worsening the outlook for the import bill of a net energy importer like India. Other oil-sensitive Asian currencies also weakened in a volatile session as crude prices surged to multi-year highs. Broader weakness across Asian currencies was driven by a stronger dollar and expectations of tighter monetary policy in the United States. Global risk sentiment weakened, with equity markets declining and bond yields rising alongside oil prices.
Outlook and future trajectory
Dealers noted that the outlook for the rupee depends largely on the trajectory of crude oil prices in international markets. If crude prices remain above $120 for an extended period, the currency could weaken further towards 97 levels. The rupee has declined over 5% in 2026, after a similar drop last year, reflecting persistent pressure on the external sector.
